With earnings in rearview mirror, SpaceX-Tesla merger chatter takes center stage

Elon Musk endorsed a potential merger between Tesla and SpaceX during SpaceX's third-quarter earnings call, saying both companies have formed special committees to explore a transaction, according to CNBC. The comments overshadowed Tesla's earnings report showing declining auto and energy revenue, and shares of both companies fell.

Analysts at William Blair said the merger appears driven by control rather than business strengthening, noting Musk already runs both as one entity. SpaceX, where Musk holds supervoting shares and about 80 percent voting control, would be the acquirer given its higher market capitalization. At Tesla, where Musk owns about 19.8 percent, a merger requires a 50 percent vote of all shares.

Regulatory hurdles include antitrust scrutiny, national security reviews tied to SpaceX's military contracts, and oversight from China, which accounted for 22 percent of Tesla's revenue last year. Former Tesla board member Steve Westly said the companies may aim to announce a proposal before the midterm elections. Musk has recently combined several ventures, including SpaceX's acquisition of xAI and the purchase of AI coding startup Cursor.

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With earnings in rearview mirror, SpaceX-Tesla merger chatter takes center stage — CNBC