SpaceX-Tesla merger talk heats up after IPO

On the day SpaceX officially began trading as a public company, the long-simmering speculation about a merger with Tesla suddenly became a concrete possibility. For years, the idea was dismissed as idle chatter, but the tone has shifted now that the space venture has its own publicly traded stock.

SpaceX President Gwynne Shotwell was the one to stoke the flames. During a conversation with CNBC, she acknowledged that combining the two companies “might make Elon Musk’s life a little easier.” She also pointed to “synergies between Tesla and SpaceX in our futures.” However, she was careful to temper expectations. “Right now I’m focused on keeping the lights on here,” Shotwell said, referencing her immediate priorities in rockets, the space station, and broadband. The takeaway was clear: not now, but not never.

Two major developments this week turned talk into a tangible roadmap. First, SpaceX went public with a staggering $1.77 trillion valuation, instantly making Musk the world’s first trillionaire. Second, the company’s filing revealed it may issue “significant equity” to fund future acquisitions. Public stock is the ultimate currency for mergers, allowing SpaceX to pay for deals with shares that have a daily market price. Shotwell confirmed this trajectory, stating, “M&A is in the future, especially when you look at the AI world.”

The consolidation of Musk’s empire is already underway. In February, SpaceX absorbed xAI in a deal valued at $250 billion. That leaves Tesla as the largest piece of the puzzle still outside the tent. Musk now runs two public companies concurrently, a situation that invites questions about governance and focus.

The ties between the two companies are already extensive. Tesla holds a stake in SpaceX, and Starlink hardware is being integrated into Tesla’s upcoming Cybercab. The two are jointly developing Terafab, a massive chip project, with Intel as a supplier. Manufacturing techniques flow both ways, and SpaceX spent $131 million on Cybertrucks last year. Their supply chains are increasingly overlapping.

Former Tesla director Steve Westly did not mince words. He told CNBC that folding Tesla into SpaceX is “absolutely likely.” While he flagged “a lot of governance issues,” he predicted the move would happen regardless. CNBC reported in May that Musk has already discussed the idea with colleagues.

The biggest hurdles are control and valuation. Musk already commands more than 80 percent of SpaceX’s voting power, giving him final authority even over his own removal. Adding Tesla would hand him that same grip on a second trillion-dollar company. On the valuation front, SpaceX lost nearly $5 billion last year. A Danish pension fund blacklisted the IPO as overpriced, and Morningstar estimates fair value at roughly $780 billion, less than half the listing price.

Westly framed the real challenge. SpaceX must succeed in at least two of its three “moonshots” , rockets, Starlink, and AI , to sustain its valuation. Adding Tesla would introduce two more high-stakes bets: self-driving cars and humanoid robots, neither of which is generating significant profit yet.

For now, Shotwell is keeping the rockets flying. She did not rule out a merger, and on a day defined by grand ambition, that was the only signal that mattered.