Tesla and SpaceX Form Special Committees to Explore a Potential Merger Worth Over 3 Trillion Dollars

Elon Musk disclosed during SpaceX's third-quarter earnings call on October 20, 2026, that both SpaceX and Tesla have formed independent special committees of directors to evaluate a potential merger between the two companies. Musk, who serves as CEO of both firms, said he is excluded from the committee discussions because he is a conflicted party under securities regulations. He added that he personally supports the idea, saying "I think it would be a good idea," but cautioned that a deal is far from certain and that no agreement has been reached.

Any combination would require shareholder approval from both sides, including what one source described as a rare 50% vote of all outstanding Tesla shares. Tesla holders would own less than half of any merged entity. SpaceX's 10-Q filing confirmed the special committee formation, noting that its controlling shareholder, Musk, would also need to approve any deal before it could be finalized.

The financial profiles of the two companies present a striking contrast that analysts say complicates any tie-up. SpaceX posted 4.4 billion dollars in quarterly net income, while Tesla carries negative 1 billion dollars in free cash flow and trades at roughly 389 times earnings. Bloomberg opinion characterized the pairing as one that "doesn't add up," citing the fundamental mismatch in financial performance. The two companies have increasingly collaborated on chips and AI projects, which Musk has pointed to as a rationale for combining them.

Markets reacted modestly. Tesla shares rose just over 1% in after-hours trading following the earnings call, while SpaceX shares climbed more than 5%, and one report put the after-hours gain at 8%. A combined entity would be valued at more than 3.5 trillion dollars, according to estimates cited in coverage of the announcement.