Elon Musk said on Tuesday that Tesla and SpaceX are actively considering a merger, though he cautioned that no agreement has been reached and shareholder approval remains uncertain.
Speaking during a SpaceX financial analyst call, Musk said special committees within both companies have been formed to examine the deal. "Do I think it would be a good idea? Yes," Musk stated. He added that the special committees "have not reached agreement on terms of any transaction and there's no guarantee that they will."
A combined entity would create one of history's largest mergers. Tesla carries a valuation of roughly $1.5 trillion, while SpaceX is valued at $2 trillion.
Musk noted that merging the two companies would strengthen work across chips, artificial intelligence and software. He recounted recent efforts to consolidate his portfolio, including SpaceX's earlier acquisition of xAI and X (the platform formerly known as Twitter), both owned by Musk. Tesla and SpaceX also launched Terafab this year, a joint venture to manufacture computer chips.
Musk described himself as a "conflicted party" and said he is not included in either special committee evaluating the merger. He compared public discussion of the possibility to "tap dancing through a minefield."
At least 50 percent of Tesla shareholders would need to approve such a merger, which Musk described as "quite a high hurdle to achieve." He noted that Tesla shareholders have previously backed his priorities, including a $1 trillion compensation package approved last year.
SpaceX's cloud compute business has emerged as its most profitable division, generating $7.5 billion in the latest quarter. Starlink, the satellite internet unit, recorded $5.2 billion in revenue. However, SpaceX as a whole has not turned a profit and has lost $1.1 billion so far this year.
Shares of SpaceX rose 8 percent in after-hours trading following Musk's comments. Tesla shares rose 2 percent after weeks of decline ahead of its own quarterly earnings report on Wednesday.