Tesla-SpaceX Merger? Elon Musk Says Any Deal Would Need the 'Appropriate Process'

Tesla Chief Executive Officer (CEO) Elon Musk has left open the possibility of a future merger between Tesla and SpaceX, saying the two companies are working more closely together, according to a Reuters report.

Speaking during Tesla's earnings call on Wednesday, Musk did not dismiss the idea of combining the companies but said such discussions could not take place during an earnings call.

"We can't talk about, you know, combining companies and that kind of thing on an earnings call," Musk said, adding that "it's got to be done with the appropriate process."

Growing Collaboration Fuels Speculation

Musk said there is "more and more overlap" between Tesla and SpaceX, pointing to the growing collaboration between the two companies.

According to the report, Tesla already supplies batteries and manufacturing technologies for certain SpaceX projects. The companies are also jointly developing Terafab, a semiconductor manufacturing facility intended to produce AI chips.

The comments have renewed long-standing speculation among investors about whether Musk could eventually combine his electric vehicle and space businesses into a single company.

Analysts See Potential Benefits, But Challenges Remain

The news agency reported that some analysts believe a merger could simplify Musk's business empire by bringing together artificial intelligence (AI), robotics, manufacturing, energy and space infrastructure under one company.

According to the report, Gene Munster, Managing Partner at Deepwater Asset Management, said after Tesla's earnings call that he now believes there is a 90% chance of Tesla and SpaceX combining over the next few years, up from 80% before Musk's latest remarks.

The news agency also reported that JPMorgan analysts said operational integration between the two companies is already significant because of shared engineering talent, AI infrastructure and Musk's leadership. However, they cautioned that regulatory approvals, particularly in China, and corporate governance issues could complicate any potential merger.

Regulatory and Ownership Questions Persist

According to the report, SpaceX President and Chief Operating Officer Gwynne Shotwell told CNBC in June that combining the two companies "might make Elon's life a little easier" by streamlining management across Musk's businesses.

At the same time, Reuters reported that analysts have highlighted several hurdles. SpaceX's ties with the US government could create regulatory challenges in certain markets, particularly China.

Analysts have also pointed out that Musk holds a much larger voting stake in SpaceX than in Tesla, making any potential merger more complex for Tesla's public shareholders.