Why Elon Musk wants to merge Tesla and SpaceX before Trump leaves office

A merger would combine Tesla and SpaceX into one company instead of keeping them as separate businesses. Their operations, finances, management, engineers, and resources could sit under one corporate roof. Because both companies are publicly traded, the deal would also require shareholder approval and regulatory review.

The proposed group would connect Tesla’s electric vehicles, driverless-car work, and Optimus robots with SpaceX’s rockets, AI investment, and planned orbital data centres. Musk says the businesses have “more and more overlap,” especially around artificial intelligence and computing power. They are already jointly developing Terafab, an AI chip factory in Texas.

The merger remains only a possibility. Both companies have created committees of independent directors to examine terms, and more than half of all Tesla shares would need to support it. Musk called that approval threshold “quite a high hurdle.” Bloomberg reported a possible announcement in the first half of 2027, with completion targeted before January 2029.

Tesla and SpaceX together are valued at about $3.5 trillion (€3.1tn). That is the proposed group’s approximate combined worth, not a confirmed purchase price. The figure makes the deal extraordinary because it would join two companies whose total value exceeds that of any merger previously described in the article.

Scale comes from both businesses. SpaceX was valued at $1 trillion (€890bn) when it absorbed Vector, while Vector was valued at $250 billion (€222bn). Tesla’s separate market value brings the combined figure to roughly $3.5 trillion. SpaceX also raised $85.7 billion (€76.3bn) in its Nasdaq listing, the biggest stock-market debut in history.

The merger is still being studied, so its final value and structure could change. Independent board committees have not agreed on terms. Any transaction would face shareholder and regulatory scrutiny, even if the companies aim to complete it before Donald Trump’s term ends in January 2029.

The connections began in 2016, when Tesla bought SolarCity, a solar-panel installer run by Musk’s cousins. The transaction faced years of litigation and was ultimately upheld by a Delaware court. It tied Tesla more closely to another Musk-linked business, despite the legal challenge.

In March 2025, Musk’s AI start-up Vector swallowed X, the social network formerly known as Twitter. Musk had acquired Twitter for $44 billion (€39.1bn) in 2022. In February this year, SpaceX then absorbed Vector, valuing SpaceX at $1 trillion (€890bn) and Vector at $250 billion (€222bn).

Four months later, SpaceX listed on the Nasdaq and raised $85.7 billion (€76.3bn), the biggest stock-market debut in history. Viewed together, these moves suggest a plan to fold Musk’s companies into one publicly traded group. The proposed Tesla-SpaceX merger would extend that pattern.

Musk sees artificial intelligence as a central force shaping both companies’ futures. Tesla is developing driverless cars and Optimus humanoid robots, while SpaceX is racing to build more computing capacity. Combining those efforts could give Tesla access to infrastructure that would otherwise remain in a separate company.

The businesses already jointly developing Terafab, an AI chip factory in Texas. SpaceX also plans data centres in orbit, which are part of its broader computing push. That infrastructure could supply computing power for Tesla’s driverless systems and robots. The article presents this technical overlap as a main reason for considering one company.

The potential benefit is not guaranteed. The merger committees are still studying the proposal, and no final terms exist. Musk raised the idea of increasing overlap between Tesla and SpaceX during Tesla’s July earnings call, then called a merger “a good idea” while warning that the process was difficult.

The financial case rests partly on different recent performances. SpaceX earned $4.4 billion in its first quarterly profit since listing, with revenue up 161%. Tesla, a day later, reported net profit down 43% to $787 million on flat revenue of $28 billion. SpaceX’s stronger growth could help offset Tesla’s weaker figures in one group.

Management could also become simpler. A combined company could move engineers and resources between operations under one roof. That could reduce disclosures and lawsuits connected with related-party deals. The companies already share AI ambitions, including Terafab, so Musk sees potential operating efficiencies as well as financial benefits.

Musk could gain greater control and potentially more wealth. He owns about 48% of SpaceX and more than 80% of its votes through special shares, but about 20% of Tesla. His Tesla pay package treats some performance goals as achieved if certain mergers occur. Still, the deal could fail shareholder or regulatory review.

Bloomberg reported that the companies may announce a deal in the first half of 2027 and complete it before Trump’s term ends in January 2029. Finishing while Trump remains president could provide a friendlier political reception. The timing matters because the merger would still face regulators and shareholders, whose approval cannot be bypassed.

Musk previously led Trump’s cost-cutting drive in 2025, then had a public falling-out before making up and returning to the administration. He has also become the biggest known donor supporting Republican candidates in the next US midterm elections, giving more than $276 million since July through America PAC.

Political power could change the companies’ environment. A Democratic win might bring tougher scrutiny of SpaceX’s federal contracts and Tesla’s self-driving software. SpaceX warned that a change in congressional power could materially and adversely affect its growth and competitive position. The proposed merger therefore faces both commercial and political uncertainty.

Economic ownership measures a person’s share of a company’s value or financial interest. Voting power measures the influence attached to shares in decisions. Different share classes can give some shares extra votes, allowing someone to control decisions without owning most of the company’s economic value.

SpaceX illustrates the mechanism. Musk owns about 48% of SpaceX but holds more than 80% of its votes through special shares. At Tesla, he owns about 20%. Since 2024, he has said he is uncomfortable making Tesla an AI and robotics leader without at least 25% of its votes. A merger could therefore strengthen his position across the combined business.

Control would matter during the transaction and afterward. Musk could have greater influence over strategy, including AI and robotics. But his SpaceX voting power cannot by itself approve the deal. More than half of all Tesla shares must support it, which Musk called “quite a high hurdle.”