Elon Musk has confirmed that both Tesla and SpaceX now have special committees of independent directors looking at whether the two companies should combine. He made the disclosure on Tuesday during SpaceX’s third-quarter earnings call, in answer to an analyst’s question.
It is the first time either company has acknowledged a formal process. Until now, Musk had only hinted at a deal. On Tesla’s Q2 call in July he said the two firms overlap more and more, but that a combination could not be discussed on an earnings call. Tuesday’s remarks go a step further, though they stop well short of announcing a deal.
Musk is shut out of the talks
Musk, who is chief executive of both companies, said the committees were formed at the request of shareholders. Because he sits on both sides of any transaction, he said he is barred from the discussions and described the situation as an awkward arrangement in which two groups talk while he stays out.
He also pushed back on the idea that a merger is a done deal. According to Musk, the committees have not agreed terms and there is no guarantee they will. He did, however, make his own view plain: asked whether combining the companies would be wise, he answered Yes
. His argument rests on the growing overlap between the two businesses in AI software, chip design, robotics, space connectivity and the joint Terafab chip project.
Neither company has named the committee members, their advisers or the scope of their mandate. Reuters, citing a person familiar with the matter, reported that the talks began only in recent weeks, that SpaceX acquiring Tesla is one possible structure, and that Tesla has been working with an investment bank. Neither company has confirmed those details.
A high bar for Tesla shareholders
Any deal would still need a shareholder vote, and Musk himself flagged the difficulty on the Tesla side. He said approval would require a majority of all outstanding Tesla shares, not just of the shares that are voted.
That threshold has been a problem before. Tesla’s proxy statement shows that a 2025 proposal to remove supermajority voting requirements attracted support from about 39.4% of outstanding shares and failed. Musk owns roughly 19.8% of Tesla, and a voting agreement means his large block of restricted shares from the 2025 CEO award is voted in line with other shareholders. At SpaceX, by contrast, he held about 84.4% of the voting power after the June listing, which makes it a controlled company.
Tesla’s proxy also describes a voluntary retail voting programme, which lets individual investors choose to have their standing instructions follow the board on a merger as well. Electrek has pointed to this and to the way Musk’s pay packages are structured as signs the board is preparing for a deal.
The ties between the two companies
- Shared director: Ira Ehrenpreis sits on Tesla’s board and joined SpaceX’s board in February 2026. Both companies treat him as independent.
- Financial links: Tesla agreed in January to put about $2 billion into xAI Holdings, which SpaceX later acquired. Tesla’s stake is now held as SpaceX Class A shares.
- Commercial links: In 2025 Tesla booked about $143 million of revenue from SpaceX, mostly vehicle sales, and roughly $430 million from xAI, mostly Megapack energy storage.
- Terafab: Musk said on the call that the joint chip effort aims for a first working test chip around May or June next year, with volume production around the third quarter of 2028.
Both companies are incorporated in Texas, where a company can ask a court at the outset of a related-party deal to rule on whether a special committee’s members are independent and disinterested.
Markets react
Tesla closed at $373.71 on Tuesday, a market value of about $1.48 trillion, while SpaceX closed at $147.79, valuing it near $2.01 trillion. In after-hours trading SpaceX rose 8.1% and Tesla 1.8%. SpaceX also reported third-quarter revenue of $14.6 billion, up 161% year on year, and net income of $4.4 billion.
Wedbush analyst Dan Ives wrote after the call that he sees an 80% to 90% chance of a merger by the end of 2027. Barclays has suggested an announcement could come before Tesla’s annual meeting on December 3. Not everyone is convinced the outcome would favour ordinary investors: critics note that a share exchange could shrink Tesla holders’ slice of the combined group, and that Musk has been on both sides of earlier related deals such as SolarCity and the xAI and X combination.
What to watch next
Tesla reports its third-quarter results after the US market close on Wednesday, with a webcast at 4:30 p.m. Central Time. Investors will be listening for any further detail on the committee process. The company delivered 486,532 vehicles in the quarter, a figure that sits alongside the strong recent run for the brand in markets such as Denmark, which we covered in Tesla Hits 100,000 Cars in Denmark as FSD’s EU Vote Nears.
What it means for EV buyers
For drivers, nothing changes today: Tesla’s range is unaffected by boardroom talks. If you are weighing a purchase while the story develops, you can check every trim in our Tesla specification database, put two models head to head with the EV comparison tool, or browse our EV recommendation lists. For the wider market picture, see our report on record UK EV sales in September 2026 and the latest on UK tariffs on Chinese EVs. More coverage is on the Electricarly blog, and you can browse every manufacturer on our brands page.
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