Elon Musk Is Considering a Tesla and SpaceX Merger: What it Could Mean for Customers

Elon Musk is considering bringing two of his biggest companies, Tesla and SpaceX, under one roof. The billionaire has confirmed that special committees at both companies are exploring a possible merger (strong emphasis on the word 'exploring’ here). So, what happens if the SpaceX and Tesla merger comes through and what can it mean for customers? Read on.

Elon Musk Wants to Merge Tesla and SpaceX

Speaking during a recent SpaceX earnings call, Musk said there was a lot to gain from combining the two companies, given their overlapping work in artificial intelligence (AI), chips, software and other technologies.

Tesla is best known for its electric vehicles, but it has also been investing in self-driving technology, AI and humanoid robots. SpaceX, meanwhile, builds rockets and operates its Starlink satellite internet business. The company has also been expanding into AI infrastructure and computing capacity.

Bringing these operations together may allow the companies to share technology, manufacturing expertise and resources. It could also give Musk a more unified business through which to pursue his plans for AI, robotics and space exploration.

Also, the two companies have already taken steps towards closer collaboration. Tesla and SpaceX are involved in Terafab, a joint effort focused on manufacturing computer chips. The project highlights how their work could overlap even without a full merger.

A $3.5 Trillion Company?

A merger would bring together two of the world's most valuable businesses. Based on the valuations cited in reports, SpaceX is valued at around $2 trillion, while Tesla is worth approximately $1.5 trillion. Their combined value would be about $3.5 trillion, making the proposed deal one of the largest corporate mergers in history.

The move would also continue Musk's efforts to bring more of his businesses together. Earlier this year, SpaceX acquired his AI company xAI and the social media platform X before going public, according to reports.

What Do Experts Say?

Some analysts believe that combining Tesla and SpaceX could help the companies share technology and resources. Jerayr Haleblian, a mergers and acquisitions expert at the University of California, Riverside, told Al Jazeera that the deal had a sound rationale, pointing to the companies' overlapping expertise in manufacturing, robotics, AI and energy infrastructure.

The proposed merger could also bring Tesla's electric vehicles, self-driving technology and robotics operations closer to SpaceX's rockets, satellite communications and computing infrastructure. However, the extent to which the companies would integrate these operations remains unclear.

What Could This Mean for Tesla Shareholders and Customers?

The deal could have implications for Tesla investors beyond the combined company's overall valuation. Investment analyst Dan Sheehan of Telos Wealth Advisors told the BBC that Tesla shareholders could end up owning a smaller proportion of a much larger and more complex business.

Sheehan also noted that there was no clear precedent for how a public company such as Tesla would be valued as part of such a merger. The final terms would therefore be important in determining whether shareholders consider the deal beneficial.

Now that we’ve talked about shareholders, let’s see if the customers can see any change from the merger.

Speaking to the BBC, David Nicholson, chief technology adviser at The Futurum Group, said that the potential merger was more about combining the companies' technological capabilities than changing their vehicles in the near term.

Tu Le, founder of the advisory firm Sino Auto Insights, also told the BBC that SpaceX technology could eventually feature in future Tesla products.

However, neither company has announced specific customer-facing changes linked to the proposed merger.

For now, the merger remains just a possibility. The special committees have not agreed on transaction terms, and shareholder approval would still be required. Any potential benefits for investors, customers or the companies themselves remain dependent on the structure and outcome of the deal.

What do you think of the possible merger? Do let us know in the comments and keep watching this space for more such updates.