Musk Keeps Tesla-SpaceX Merger Alive as $1.5 Trillion SpaceX Deepens Ties

3 articles · Updated · The Motley Fool · Jul 24

Tesla’s July 22 earnings call turned to dealmaking when Elon Musk declined to rule out combining Tesla with SpaceX, saying the two companies have “more and more overlap” and any move would require the “appropriate process.”
That overlap already includes a new investment and framework agreement, Grok integration in Tesla vehicles, planned Starlink connectivity for Cybercab robotaxis, and Terafab—a SpaceX chip venture Musk called a “gigantic project.”
Two hurdles loom largest: valuation and governance. SpaceX is valued around $1.5 trillion on roughly $19 billion of trailing revenue and remains unprofitable, while Tesla is worth about $1.2 trillion and trades above 300 times earnings.
Regulators could pose an even longer challenge because SpaceX is a major U.S. defense contractor, while Tesla relies heavily on China for manufacturing and sales; a review in both countries could drag on for years.
The merger talk surfaced as Tesla reported a 1.4% second-quarter operating margin and its shares fell about 14% Thursday, while newly public SpaceX is due to report its first earnings on Aug. 4.