SpaceX and Tesla are moving forward with merger negotiations, and a deal could be announced as soon as December, according to Bloomberg. The merger could consolidate Elon Musk’s artificial intelligence, robotics, electric vehicle and aerospace operations under one corporate structure.
Musk said during SpaceX’s third-quarter earnings call last month that a merger with Tesla would be “a good idea.” He also confirmed that the companies had formed special committees of independent directors to discuss a potential combination.
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SpaceX and Tesla could not be immediately reached for comment on the report. As of the last market close, SpaceX had a market capitalization of approximately $1.90 trillion, while Tesla was valued at around $1.55 trillion.
The two companies have also discussed a scenario in which the merger announcement could be pushed to early 2027, Bloomberg reported.
Previous reports suggested that the merger could give Musk majority voting control of the combined company without requiring him to meet several ambitious performance targets tied to his compensation package.
However, the proposed transaction would not automatically trigger a $1 trillion payout for the billionaire, as his compensation arrangements at the two companies have different structures. According to Reuters, which reviewed the compensation agreements and consulted six executive compensation experts, a merger could provide Musk with a faster route to securing control of Tesla. It could also allow him to bypass some of the operational milestones attached to his compensation packages.
Both companies’ boards and their advisers are reportedly discussing corporate governance arrangements and the terms of a potential merger. The announcement could be delayed until 2027, according to Bloomberg.
The proposed merger would reportedly be the largest in history. It comes less than a year after another merger involving two of Musk’s businesses, xAI and SpaceX.
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The deal could face several regulatory and operational hurdles, including questions over the future of Tesla’s China operations. U.S. regulators could raise concerns about SpaceX, a defense contractor, having operations in mainland China, according to a note from JPMorgan analyst Rajat Gupta cited by Bloomberg.
SpaceX and Tesla have also collaborated on Terafab, an advanced AI semiconductor complex planned in Grimes County, Texas. Musk said on X that the factory would be “the largest and most valuable building on Earth by far.”
More than 100 million square feet of manufacturing space is planned for the facility, according to SpaceX. The joint venture aims to produce its first test chip around May or June next year, with volume production targeted for the third quarter of 2028, Musk said during an earnings call.