Could an ‘Elon Corp.’ Emerge? Tesla-SpaceX Merger Talk Gains Momentum

Tesla, Elon Musk’s U.S. electric-vehicle maker, unveiled a hovering sports car using SpaceX rocket technology, stoking speculation that the two companies could eventually merge. The move is being viewed as part of a broader effort to speed vertical integration across Musk’s artificial-intelligence businesses by combining Tesla’s autonomous-driving and robotics capabilities with SpaceX’s space and propulsion technologies.

CNBC reported on October 16 that Tesla unveiled its next-generation Roadster a day earlier at a SpaceX test facility in McGregor, Texas. The debut came about nine years after Tesla first announced development plans in 2017.

The white Roadster shown at the event sped up a curved ramp and then drove upside down using a suction system. It then leapt into the air, rotated, hovered briefly and landed. The vehicle uses thrusters, high-pressure vessels and powerful fans developed by SpaceX. Tesla said it can accelerate from a standstill to 60 miles per hour in less than one second.

At the event, Musk said, “You’re going to see what happens when the world’s best car company works with the world’s best rocket company.”

The demonstration showcased technical cooperation between the two companies and reignited merger speculation. CNBC reported that the market price on U.S. prediction market Kalshi for a contract tied to Tesla and SpaceX merging before March next year rose to 56% on the morning of October 16 from 29% on October 14. The figure does not represent the actual probability of a merger, but rather market participants’ expectations.

Wall Street has also begun discussing the possibility. Barclays analyst Dan Levy raised the prospect of a merger in a report this week and said a plan could be announced before Tesla’s annual shareholder meeting, which must be held no later than December 6.

A central rationale for such a deal is vertical integration of Musk’s AI businesses. Barclays discussed linking Tesla’s autonomous robotaxi and humanoid robot Optimus with the AI model Grok and the AI software project Macrohard. It also said the semiconductor project Terafab, involving Tesla, SpaceX and xAI, could become a major driver of any merger effort.

“There may be some financial synergies, but the real value would be in vertical integration,” Levy wrote. Bill Birmingham, head of market research at Rex Financial, said Musk is weaving together the future of transportation by integrating automotive and rocket technologies. That, he said, helps plant in investors’ minds the idea that a merger has an engineering logic.

Gene Munster, a partner at venture-capital firm Deepwater, wrote on X that the Roadster event was the latest example of why Musk appears eager to combine Tesla and SpaceX. Major investment banks including Barclays have consistently raised the possibility that the two companies could announce a merger before Tesla’s regular shareholder meeting in December or sometime next year.

Still, no merger has been officially announced. Even if the companies move ahead, they would face hurdles including valuation, shareholder approval and regulatory review. The Roadster is also still some time away from commercialization. Musk said production would begin in 2028, but did not disclose a sale price. Tesla has been taking reservation deposits since 2017, but has repeatedly missed launch targets. It also remains unclear whether the hovering function shown this time can be applied unchanged to mass-produced vehicles or whether such a vehicle could legally operate on public roads.

Gwynne Shotwell, SpaceX’s president and chief operating officer, said in a media interview in June, shortly after the company’s listing, that there was “no doubt” the two companies would have synergies. She added that a merger would “make Elon’s life a little easier.”

Musk also said at the Roadster demonstration on October 15 that Tesla and SpaceX engineers had worked closely together to build something better than the James Bond car, subtly signaling that collaboration between the two companies could open new possibilities.

Kang Kyung-ju, Hankyung.com reporter memory@hankyung.com