Tesla and SpaceX now have committees weighing a merger

The merger question that has followed Elon Musk's companies since January now has a formal process behind it. On SpaceX's third-quarter earnings call on Tuesday, Musk said the Tesla and SpaceX boards have each formed a special committee to discuss a combination, according to Yahoo Finance's live coverage of the call. He said the committees were formed at the request of shareholders and are made up of independent directors. Because he leads both companies, he said he is a conflicted party and cannot sit in on their discussions.

Musk was careful about what that does and does not mean. He told analysts a merger should not be assumed, and that shareholders of both companies would need to support any deal. Asked directly whether a tie-up would be a good idea, he said yes.

Investors had already pushed the question to the front of the call. Reuters reported earlier Tuesday that "When will SpaceX merge with Tesla?" was the second-most upvoted question submitted ahead of the webcast, with 26 votes, behind only a question about Starship's lunar lander hardware. The same question drew 128 upvotes on Tesla's investor relations site. Barclays told clients last week that a deal could be announced before Tesla's annual meeting, with SpaceX the likelier acquirer. Neither company has committed to anything.

SpaceX's strong financial quarter

SpaceX gave the committees a strong quarter to work with. Revenue came in at $14.58 billion against the $12.7 billion analysts expected, and earnings of 35 cents a share beat the 15-cent estimate, per Yahoo Finance. Adjusted EBITDA was $8.81 billion. Capital spending was $19.59 billion for the quarter, in line with estimates, with $16.44 billion of it going to AI. Starlink brought in $5.2 billion and finished the quarter just under 14 million broadband subscribers after adding 1.6 million. SpaceX shares rose roughly 4% after hours.

Reuters also flagged the part of the SpaceX story a merger committee would have to price. Starlink is profitable and funds the chips, data centers and Grok work, but losses at the AI businesses have grown sharply. AI revenue is concentrated in a few customers, including Google and Anthropic, on compute contracts that can be ended on about 90 days' notice.

Tesla's financial outlook

Tesla's turn comes Wednesday after the close, with the call at 5:30 p.m. ET. Electrek's preview puts Wall Street consensus at $28.06 billion in revenue, essentially flat with the $28.1 billion Tesla reported a year ago, and adjusted earnings of 45 cents a share, down from 50 cents. Tesla delivered 486,532 vehicles in the quarter, 2.1% fewer than its record 497,099 a year earlier but well ahead of the 461,974 analysts expected. Energy storage was the soft spot: 13.7 gigawatt-hours deployed, up 9.6% from 12.5 GWh, but short of the roughly 15.9 GWh forecast.

The role of the joint Roadster project

The merger talk lands a week after Tesla showed what the two companies already build together. At an event outside Waco, Texas, on October 15, delayed two weeks by severe weather, Tesla unveiled a second-generation Roadster that uses SpaceX-developed cold-gas thrusters, TechCrunch reported. The car drove up an inverted ramp, flipped, and landed on its wheels, then used its thrusters to lift over a line of Tesla vehicles while moving: a Cybercab, a Cybertruck, a Semi, a Model Y and a Model 3. Tesla showed it reaching 60 mph in about a second. Aviation Week put the company's claim at 0.81 seconds.

Engineering vice president Lars Moravy said ten thrusters draw on 600 liters of compressed air, stored in carbon-fiber-wrapped pressure vessels packed into every usable void in the car, and that the tank can be recharged. Aviation Week reported four thrusters point out the back with more underneath, and Tesla says the system produces four to five times the force the tires can put down.

Unveiling Roadster versions

• Performance, with a $50,000 reservation, is the road-ready two-seater with active aerodynamics and a suction system.
• Thrust, at a $250,000 reservation, adds rear cold-gas thrusters and the sub-one-second sprint.
• Rocket is a single-seat, ten-thruster, invitation-only version that Aviation Week notes is not approved for public roads.

Three versions are planned, per TechCrunch. All three claim 300 miles of range and a top speed above 230 mph. Musk said production starts in 2028. Tesla first took $50,000 deposits on the car in 2017.

Musk set expectations low on two fronts. He told the crowd that safety is not the car's main goal and that buyers who prioritize it should look elsewhere, and he said he is not sure the Roadster moves the needle on revenue. Aviation Week expects the Thrust version to face regulatory questions because it expels a gas plume, and the Rocket version to raise novel legal and safety issues.

Implications of a Tesla SpaceX merger

For fleet operators and transportation buyers, the committees are the news. A combined company would put Starlink connectivity, Tesla's energy storage business and two capital budgets that each run into the tens of billions a year under one roof. The questions a merger committee has to answer, who acquires whom, at what exchange ratio, and how Musk's conflict is handled, will decide whether that happens in 2026 or at all. Until the committees report, the Roadster is the only joint product with a date on it, and that date is 2028.