Tesla and SpaceX Form Special Committees to Study a Possible Merger, Musk Confirms

People have been guessing about a Tesla and SpaceX merger for months. Now there's an official step. During SpaceX's third-quarter earnings call on Tuesday, October 20, Elon Musk confirmed that both companies have each formed a special committee of independent directors to study whether combining the two makes sense.

No deal has been agreed, and Musk was careful to say so.

What Musk Said

Musk said the committees were set up because shareholders asked for them:

"Both SpaceX and Tesla have formed special committees to discuss this idea at the request of shareholders. Because I'm a conflicted party, I can't actually be in the discussions of the special committees."

He called the arrangement "an odd kabuki dance where two groups of people are talking and I can't be in the conversation."

He was clear about his own view, though. "Do I think it would be a good idea? Yes," Musk said. He listed the areas where the two companies already work together: super intelligence software, chip design, the Terafab facility in Austin, robotics, mass to orbit, and connectivity. "I do think there's a lot of merit to combining the companies as we are pretty much in the super intelligence singularity," he added.

Don't Count on It Yet

Musk also tried to cool expectations. He said the committees have not agreed on terms for any transaction, and that treating a merger as a sure thing "would be overstating it."

Any deal would go to a shareholder vote, and Tesla's bar is high. A merger would need approval from 50 percent of all outstanding Tesla shares, not just 50 percent of the shares that actually get voted. Musk called that "quite a high hurdle."

Tesla has missed that bar before. Its 2025 attempt to declassify the board got support from only 39.4 percent of outstanding shares and failed. Musk's own voting stake is near 20 percent after he exercised his 2018 options in June. So a deal would need wide support from institutional investors and from retail shareholders, who often don't cast their votes at all.

Timing: Not at the December Meeting

On Monday, Tesla filed its proxy statement for its December 3 annual meeting. The ballot has just three items:

• Director elections for Elon Musk, Robyn Denholm, and JB Straubel
• A say-on-pay vote
• Ratification of the auditor

Barclays analyst Dan Levy had said a merger announcement would need to come by late October or early November to make the annual meeting. With no terms agreed, any merger vote would most likely need its own special shareholder meeting later on.

How We Got Here

Musk has been hinting at this for weeks. At the All-In Summit in September, he asked "who can imagine what action one might take when there's so much close collaboration." Last week's Roadster unveil, which uses cold gas thrusters derived from SpaceX technology, added to the talk.

The two companies are already linked in a few ways. They share the Terafab chip project, and Tesla owns a small SpaceX stake that came from its earlier investment in xAI.

SpaceX also has strong numbers right now. It reported Q3 revenue of $14.58 billion, up 161 percent from a year earlier. Its Super Intelligence segment is now its largest, at $7.56 billion. A higher SpaceX valuation would affect the exchange ratio offered to Tesla shareholders if a deal ever happens.

What This Means for Tesla Owners

For now, nothing changes for you as a driver. Your Model 3, Model Y, Model S, Model X, or Cybertruck works the same as it did yesterday. Warranties, service, Supercharging, and software updates are not part of the committee talks Musk described. A merger, if one happens, is still a long way off: terms have to be agreed, and then a large majority of outstanding shares has to approve it.

If you also own Tesla stock, this is worth following. Look for proxy materials if a special meeting is ever called, and remember that with an "outstanding shares" threshold, a vote you don't cast effectively counts against the deal.

What's Next

Tesla reports its own third-quarter results after the market closes today, Wednesday, October 21. Merger timing was already one of the top retail investor questions going into SpaceX's call, so expect the special committees to come up again on Tesla's call. We'll keep watching and share anything that matters to Tesla owners.