Tesla and SpaceX will eventually merge? Investors are not buying a specific company, but Elon Musk.
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The merger between Tesla and SpaceX may no longer be a question of "if," but rather "when." The boundaries between Elon Musk’s two core assets are rapidly dissolving, and investors who buy into these companies have always essentially held the same thing—the person of Elon Musk himself.
On Wednesday, Musk hosted Tesla’s Q1 earnings call. Despite a 16% year-on-year increase, almost no one mentioned automobile sales; the company’s focus has fully shifted to energy storage, robotaxis, and the humanoid robot Optimus. More remarkably, Tesla spent $2 billion this quarter to purchase SpaceX stock—a rare sign of cross-company capital movement. Meanwhile, SpaceX is preparing for an IPO at nearly $2 trillion valuation, and previously merged with Musk’s social media and AI company, xAI.
The aftermarket barely reacted to this news; Tesla’s stock price remained unchanged. Investors seem to have digested it all: a bet on Tesla or SpaceX is, essentially, a bet on Musk.
As the capital flows between the two companies deepen and joint projects materialize, the logic for a merger becomes increasingly coherent. The only question is how to handle potential conflicts of interest—and Musk happens to be the largest common shareholder in both companies.
Tesla: Automotive business becomes a “side gig”
Tesla’s narrative is undergoing a fundamental transformation.
In this earnings call, auto sales were intentionally sidelined. Although the car business still supports the company’s basic cash flow—$4 billion operating cash flow in Q1, $1.4 billion free cash flow—management’s vision has shifted much further ahead: robots, artificial intelligence, and the bipedal autonomous humanoid robot Optimus, designed to perform dangerous, repetitive, or tedious tasks.
Sharp expansion in capital expenditure underscores the scale of this transformation. Musk and the CFO warned that total capital expenditure in 2025 will reach $25 billion, for semiconductor manufacturing and robotic factory construction—far above analysts’ previous expectation of $20 billion. According to LSEG data, just a year ago analysts estimated 2026 capital expenditure at $11 billion—an expectation that has been doubled in just one year.
Some factories have already started renovations for robot mass production. This enterprise, once defined as an electric vehicle company, is increasingly resembling a comprehensive tech platform centered on Musk’s vision.
SpaceX: Valuation and ambition both inflated
SpaceX’s actions are equally extraordinary.
This week, SpaceX disclosed it had made a $60 billion bid to acquire the AI programming tool Cursor; if the deal falls through, it will pay a $10 billion breakup fee. In comparison, Tesla spent only $2 billion this quarter buying SpaceX stock—an act that seems downright “restrained.”
The magnitude of these moves again reflects SpaceX’s essential nature: it is a Musk-style “moonshot”—just one that happens to have a satellite and rocket business operating in reality.
If SpaceX completes an IPO at nearly $2 trillion valuation as planned, Musk will preside over the quarterly earnings calls of two listed companies. At that point, discussions about merging the two companies may be unavoidable—after all, both securities are driven by the same person.
Terafab: A "dress rehearsal" before the merger
The boundary between the two companies has already begun to intermingle on a specific project.
Tesla and SpaceX, together with Intel, are jointly building a semiconductor factory in Texas called "Terafab." Musk stated that this collaboration will be reviewed by separate independent directors from both companies to ensure fairness to all shareholders.
But this governance arrangement faces a structural difficulty: the largest shareholder in both companies is Elon Musk himself.
This is the core conflict of interest any potential merger must address. However, history shows Tesla’s non-Musk shareholders have always given him a great deal of trust. Future public shareholders of SpaceX will likely do the same—and, since Musk is expected to hold super-voting shares, other shareholders have limited institutional influence anyway.
Endgame: One Musk, one security
Whether Tesla or SpaceX, the logic behind their valuations has little to do with recent profits or cash flow. The market is pricing in Musk’s personal long-term vision and execution capacity.
The core judgment of a Financial Times column is: If what shareholders truly seek is exposure to Musk himself, then combining the two companies into one stock is the logical endgame.
Currently, there is no official news indicating the merger plan has entered any substantive stage. But every cross-company capital movement, every joint project, every convergence of business narrative, is bringing this endgame closer. For investors, the question has perhaps never been “buy Tesla or buy SpaceX,” but rather—how much do you trust Musk?
Risk disclosure and disclaimerThe market is risky, investment should be cautious. This article does not constitute personal investment advice, nor does it take into account individual users’ specific investment objectives, financial circumstances, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. If you invest based on this, you are responsible for the results. ```