Musk Avoids Tesla-SpaceX Merger Talk as Overlap Grows

Elon Musk declined to discuss the possibility of combining Tesla and SpaceX during Tesla’s earnings call on Wednesday, while acknowledging that the two companies are becoming increasingly connected through shared technologies and projects.

Responding to a question from Wells Fargo analyst Colin Langan about a potential merger, Musk said, “We can’t talk about, you know, combining companies and that kind of thing on an earnings call—it has got to be done with the appropriate process.” Although he avoided addressing the issue directly, Musk said there is “more and more overlap” between Tesla and SpaceX.

Musk pointed to several examples of that growing relationship, including the integration of Starlink into Cybertrucks and, later, all Tesla vehicles. He also highlighted TeraFab, a proposed AI chip manufacturing initiative involving Tesla, SpaceX and xAI, which is now a subsidiary of SpaceX. Musk added that xAI, now called SpaceXAI, is developing an artificial intelligence model that will act as a “manager” for Tesla’s Optimus humanoid robots, which he has described as potentially becoming the company’s “biggest product ever.”

Tesla’s general counsel also addressed the question during the earnings call, saying the automaker would “continue to benefit from our relationship with SpaceX.” The company’s legal chief cited numerous transactions and investments between the two businesses that have already provided mutual benefits.

Tesla reported second-quarter revenue of $28.2 billion, surpassing analysts’ expectations of $27.2 billion, according to FactSet. However, earnings came in at 33 cents per share, missing the consensus estimate of 55 cents. The company also recorded its first quarter of negative free cash flow in more than two years, with a deficit of just over $1 billion. Chief financial officer Vaibhav Taneja reiterated that Tesla expects to spend more than $25 billion this year, adding that investment levels are likely to increase in the years ahead.

Speculation about a future merger between Tesla and SpaceX has grown as Musk continues to bring his companies closer together. SpaceX President Gwynne Shotwell previously told CNBC that combining the businesses “might make Elon’s life a little easier,” adding there was “no question that there are synergies between Tesla and SpaceX in our futures.” Reports have also suggested Musk has explored the idea internally, while some Tesla employees reportedly expect a deal to happen. Ahead of SpaceX’s initial public offering last month, former Wedbush Securities analyst Dan Ives said his firm estimated there was an 80% or greater chance that Tesla and SpaceX would merge by 2027, arguing the “groundwork is already in place for both operations to become one organization.”