Elon Musk considers potential merger between SpaceX and Tesla as prediction markets suggest 74% probability by 2027.
Elon Musk noted during a recent Tesla conference call that there is increasing overlap between his two major companies, Space Exploration Technologies (SpaceX) and Tesla. While he did not provide a definitive guarantee, the overlap is evidenced by projects like Terafab, a joint-venture semiconductor manufacturing project, and the integration of SpaceX's Starlink service into Tesla's Cybercab. Prediction market Kalshi reports a 74% probability that the two companies will merge before May 1, 2027. However, analysts suggest that a merger might present logistical challenges. While combining the businesses under one roof would consolidate Musk's portfolio, SpaceX remains a capital-intensive business that is not yet profitable outside of Starlink. Conversely, Tesla's profits are partially driven by non-sustainable sources like interest income and regulatory credits. Investors should consider whether the cost synergies are significant enough to justify merging two distinct businesses with different operational styles.