Tesla and SpaceX form committees to discuss potential merger

Tesla and SpaceX have established special committees of independent directors to evaluate a potential merger, chief executive Elon Musk announced on October 20, 2026. Musk, who owns nearly 20% of Tesla and under 50% of SpaceX, excluded himself from discussions due to conflicts of interest. A deal between $1.5 trillion Tesla and $2 trillion SpaceX would mark one of history's largest corporate consolidations, requiring approval from at least 50% of all Tesla shareholders.

Special committee merger discussions

• ▪Tesla and SpaceX have formed special committees of independent directors to discuss a potential merger between the two companies
• ▪Elon Musk stated during SpaceX's October 20, 2026 earnings call that the merger discussions between Tesla and SpaceX are preliminary and special committees of independent directors formed by the two companies have not agreed on transaction terms

Shareholder approval requirements

• ▪A potential acquisition of Tesla by SpaceX on October 20, 2026 would require approval from at least 50% of all Tesla shareholders, which Elon Musk described as a high hurdle
• ▪Special committees of independent directors at Tesla and SpaceX were established at the request of shareholders, who must ultimately approve any final transaction terms

Company valuations and stock market reaction

• ▪SpaceX shares rose 8% and Tesla shares gained nearly 2% in extended trading following Elon Musk's comments about a potential Tesla-SpaceX merger on October 20, 2026
• ▪Tesla is valued at approximately $1.5 trillion and SpaceX is valued at $2 trillion, making a combination of the two companies one of the largest corporate mergers in history

Terafab chip manufacturing joint venture

• ▪Tesla and SpaceX recently launched Terafab as a joint initiative to manufacture computer chips
• ▪Elon Musk said Terafab, a chip manufacturing joint venture between Tesla and SpaceX, plans to produce its first test chip around May or June 2027 and reach volume production by the third quarter of 2028

SpaceX third-quarter 2026 financial performance

• ▪SpaceX achieved a third-quarter 2026 net income of $4.4 billion on overall revenue of $14.58 billion, while Starlink reached 13.6 million subscribers
• ▪SpaceX reported third-quarter 2026 AI-related revenue surged nearly tenfold year-over-year to $7.56 billion, primarily from renting data-center compute capacity to companies like Anthropic, Google, and Reflection AI