Tesla-SpaceX Merger Odds Rise to 90%, Gene Munster Says
A potential merger between Tesla and SpaceX now appears increasingly likely, according to Deepwater Management analyst Gene Munster.
Munster raised his estimated probability of a combination after the subject came up during Tesla’s second-quarter earnings call.
Munster Raises His Merger Estimate
Before the earnings call, Munster believed there was an 80% chance that Tesla and SpaceX would merge within the next few years.
However, he later increased that estimate to 90% in a post on X.
Munster said he was surprised that Tesla executives were willing to discuss the possibility during an earnings call. He also noted that Elon Musk highlighted the growing benefits of cooperation between the two companies.
Elon Musk Points to Growing Collaboration
During the call, Musk said Tesla and SpaceX were working together across an increasing number of projects.
He specifically highlighted Terafab, a chipmaking initiative supported by both companies, as an area where their operations overlap.
However, Musk also made clear that a formal merger could not be discussed casually during an earnings presentation.
He said any potential combination would need to follow the appropriate corporate and regulatory process.
Tesla and SpaceX Already Work Together
Merger speculation has increased because Tesla and SpaceX already maintain a close commercial relationship.
SpaceX uses Tesla battery storage systems to support its artificial intelligence data centers.
Tesla has also integrated Grok, the AI assistant linked to Musk’s technology businesses, into its vehicles. In addition, Tesla has sold vehicles to SpaceX and related companies.
These partnerships have strengthened the argument that the two businesses could benefit from closer integration.
Terafab Strengthens the Strategic Connection
Terafab may represent the clearest example of cooperation between Tesla and SpaceX.
Both companies are supporting the chipmaking project, which could reduce their dependence on external semiconductor suppliers.
The venture may also help Musk’s businesses secure the computing hardware needed for electric vehicles, artificial intelligence systems, robotics and space technology.
Musk Has Previously Combined His Companies
Elon Musk has a history of bringing his businesses together when their operations begin to overlap.
Most recently, xAI was folded into SpaceX before the rocket company’s public market debut.
Tesla also acquired SolarCity in 2016 and incorporated the solar energy company into its broader energy operations.
That transaction received antitrust approval, although it later triggered a major shareholder lawsuit. The case was ultimately decided in Musk’s favor in 2022.
SpaceX Valuation Comes Under Pressure
SpaceX achieved a strong public market debut in June and briefly reached a valuation of approximately $2.6 trillion.
However, its market value later declined sharply amid concerns that the company’s valuation had become excessive.
Investors also considered the potential impact of insider share sales following the listing.
Tesla Shares Fall After Earnings
Tesla shares moved lower after the company reported weaker-than-expected second-quarter profit.
The electric vehicle maker also recorded negative free cash flow, adding to investor concerns about its financial performance.
Despite these pressures, speculation surrounding a possible Tesla-SpaceX merger is likely to continue as the companies expand their commercial and technological partnerships.
