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Tesla and SpaceX are in active discussions about merging into a single company, with both sides targeting a December 2026 announcement, though a final decision could slip into early 2027, Bloomberg has reported.
Negotiators from the two companies are currently working through the core terms of any agreement, including how the combined entity would be governed and what proportion of shares in the merged company would be allocated to existing Tesla shareholders. The boards of both companies have already established special committees to evaluate the potential transaction, a step Elon Musk disclosed publicly in October 2026 when he said he viewed the combination favourably.
The scale of any deal would be extraordinary. SpaceX carries a private valuation of approximately $1.9 trillion, while Tesla’s market capitalisation exceeds $1.5 trillion, putting the combined notional value at roughly $3.4 trillion. If completed on those terms, the transaction would rank among the largest corporate combinations in history.
A sprawling technology conglomerate
A merged entity would operate across electric vehicles, rocket manufacturing, satellite networks, battery production and artificial intelligence. According to the source reporting, the companies intend to place particular emphasis on AI, deploying it more aggressively in space operations, autonomous transport and robotics.
The two firms already collaborate on at least one joint project: Terafab, a microchip fabrication plant under development in Texas.
China exposure as a potential obstacle
One of the most significant complications facing any merger is Tesla’s deep manufacturing presence in China. SpaceX, by contrast, works closely with the United States defence sector — a combination that could draw heightened regulatory scrutiny from American authorities. Reports have previously indicated that Tesla was examining a sale of its Chinese operations as a way to smooth the path toward a deal, though no such transaction has been announced.
Talks are continuing. If the two sides can resolve the outstanding disputes, a formal merger announcement is expected in December 2026 or, failing that, in the opening weeks of 2027.