Tesla and SpaceX merge accelerates: $3.47 trillion in scale, transaction expected to be officially announced in December at the earliest

Article | Joanne

Editor | Su Yang

On November 12 local time, according to Bloomberg, Elon Musk's SpaceX and Tesla are advancing merger negotiations, with the announcement of the deal possibly occurring as early as December this year. Given the complex corporate structure and regulatory issues involved, the merger announcement may be delayed until early 2027.

The potential scale of this deal is quite astonishing. As of the close of the most recent trading day, SpaceX's market value is approximately $1.90 trillion, while Tesla's is about $1.57 trillion, bringing the total for both companies to $3.47 trillion.

If the merger is completed, businesses such as rocket launches, satellite internet, electric vehicles, energy storage, artificial intelligence, and robotics will be integrated into one company. This will not only reshape the organizational structure of Musk's enterprises but could also become one of the largest corporate consolidations in global business history.

However, $3.47 trillion is merely the simple sum of the current market values of the two companies. There is currently no clear answer regarding the structure of the deal, how shareholder rights will be allocated, and whether regulatory agencies will approve it.

### 01 Accelerated Negotiations


In October this year, during SpaceX's third-quarter earnings call, Musk explicitly stated that merging with Tesla "is a good idea" and confirmed that both parties have established a special committee composed of independent directors to discuss merger matters.

This indicates that the two companies have initiated formal corporate governance procedures, rather than merely discussing the possibility of business cooperation.

Negotiations are progressing, and the deal may be publicly announced as early as December this year, although a delay until early 2027 is also possible. Meanwhile, the merger still faces multiple obstacles, including SpaceX's contracts with the U.S. Department of Defense and Tesla's reliance on the Chinese market, which could be key factors affecting the transaction process.

From a timing perspective, both parties clearly hope to expedite negotiations, but this does not mean the deal has entered its final stages. The merger agreement, equity arrangements, and regulatory approvals still need to be addressed one by one.

Currently, neither company has immediately responded to related reports.

### 02 AI Landscape


If we only look at their main businesses, SpaceX and Tesla seem to have little overlap.

One is responsible for rocket launches and satellite internet, while the other produces electric vehicles and energy storage devices. However, Musk's strategic adjustments in recent years are gradually aligning the two companies on the same technological development track.

Tesla's growth story is no longer limited to electric vehicle sales. Autonomous driving, Robotaxi, and the Optimus humanoid robot are becoming important directions for the company's future. These businesses require large-scale AI training, chip computing power, and energy supply.

SpaceX's business landscape is also changing. In addition to reusable rockets and Starlink satellite internet, Musk is advancing AI-related initiatives. With xAI being incorporated into its business portfolio, SpaceX's reach is further extending into AI infrastructure.

The true intersection of the two companies lies in the three foundational resources behind artificial intelligence: chips, computing power, and energy.

Among them, Terafab is a specific example of collaboration between the two parties.

This year, SpaceX and Tesla jointly advanced the Terafab chip manufacturing joint venture project. Musk stated during the October earnings call that the project is expected to produce its first test chips between May and June 2027, with plans for mass production in the third quarter of 2028.

For Tesla, building its own chip manufacturing capability helps meet the computing power demands for autonomous driving and humanoid robots; for SpaceX, chips are an important foundation for future satellite networks and space data centers.

If the two companies further merge, chip research and development, computing power investment, and energy infrastructure construction could potentially be integrated into a unified resource allocation system.

However, this raises another question: since both parties have already advanced these projects through joint ventures and business cooperation, is there a need for further integration at the equity level?

This may be one of the most important questions for investors to consider when evaluating this transaction. How much additional value can business synergy bring, and specific financial returns are needed to prove it.

### 03 Control Dispute

For the shareholders of both companies, the most direct impact of the merger is not the expansion of business scope but the potential change in the shareholding structure.

According to current market valuations, SpaceX is approximately $1.90 trillion, and Tesla is about $1.57 trillion. Assuming both parties opt for an all-stock transaction, existing shareholders of SpaceX and Tesla will receive shares in the merged company according to an agreed ratio.

However, this is not a transaction that can be completed simply by adding the market values of the two companies. Who acquires whom, how the exchange ratio is determined, and whether a premium is set for the acquisition have not been formally confirmed.

More noteworthy is Musk's control in the new company.

According to publicly disclosed equity data, Musk holds an economic stake of about 40% to 45% in SpaceX and nearly 20% in Tesla. However, the voting rights structures of the two companies differ significantly: SpaceX employs a dual-class share structure, with Musk holding over 80% of the voting rights; Tesla implements a one-share, one-vote structure, where voting rights are generally consistent with shareholding ratios.

This is also one of the reasons Musk has expressed dissatisfaction in the past. He has publicly stated that he wishes to have sufficient voting rights in Tesla to ensure he can promote the company's long-term artificial intelligence and robotics strategy.

Therefore, the merger involves not only asset and business integration but also changes in the equity and governance relationships of the two companies.

If the new company adopts SpaceX's existing multiple voting rights structure, Musk could further consolidate control over the merged group. However, whether this arrangement can gain approval from Tesla shareholders remains highly uncertain.

For Tesla investors, the consideration is whether accepting a new shareholding structure can lead to greater business synergy and long-term returns. If the merger valuation, exchange ratio, or voting rights arrangement is not reasonable enough, shareholders may completely oppose the transaction.

### 04 Regulatory Challenges


Compared to business synergy and equity distribution, regulatory issues may be the most challenging obstacle to this transaction.

SpaceX and Tesla's businesses are positioned differently within the U.S. national security system and the global automotive supply chain. After the merger, the originally relatively independent business systems will create more complex cross-border connections.

First is SpaceX's U.S. defense business. SpaceX has long been involved in U.S. government space launches, satellite communications, and other projects, maintaining close cooperation with the U.S. Department of Defense, intelligence agencies, and NASA. Some of these businesses involve sensitive technologies, national security information, and government procurement contracts.

Once merged with Tesla, regulators will need to assess whether the new corporate structure will affect the execution of related contracts, technology confidentiality, and security management.

Secondly, there is Tesla's business in China. China is one of Tesla's most important overseas markets, and the Shanghai Gigafactory is a crucial part of its global production system. Tesla has manufacturing, supply chain, and sales networks in China, involving a large amount of cross-border data and business activities.

Merging a space company deeply involved in U.S. defense projects with an automotive company that has significant industrial presence in China will inevitably raise more complex national security and cross-border regulatory issues.

Agencies such as the Committee on Foreign Investment in the United States (CFIUS) may focus on the transaction's impact on U.S. national security, while relevant Chinese regulatory authorities will need to assess its effects on market competition, investment, and related businesses based on the specific transaction structure.

For both negotiating parties, how to find a balance between a unified corporate structure and the regulatory requirements of different countries will directly affect whether the transaction can be realized.

### 05 Integration Ambition

The potential merger of SpaceX and Tesla reflects Musk's attempt to reorganize his business landscape.

In the past, Tesla was responsible for cars, energy, and robotics, while SpaceX handled aerospace and satellite internet, and xAI focused on artificial intelligence model development. Different companies established connections through investment, cooperation, and technology sharing.

The merger means that these businesses may further transition from project cooperation to capital and organizational unification.

In the long term, the industrial chain Musk hopes to connect is not limited to cars and robots on Earth but also includes satellite networks, space transportation, and future space computing infrastructure. Chips, energy, and artificial intelligence serve as the common technological foundation throughout.

However, the larger the business landscape, the more complex the management and regulatory challenges become. Different businesses have varying profit models, capital requirements, and risk attributes. How to avoid imbalances in resource allocation will test the management capabilities of the new group.

$3.47 trillion is just the starting point for this transaction.