In Elon Musk’s mind, Tesla and SpaceX have already merged. Why not make it official?

“My companies are, surprisingly in some ways, trending towards convergence,” Tesla, SpaceX, and xAI CEO Elon Musk wrote on his social media platform, X, back in November after a shareholder vote for Tesla to invest in xAI fell short.

Musk may already be telling us how his empire looks inside his mind: less a collection of companies than a single integrated system. The reasons it makes sense are becoming too numerous to ignore, and the convergence Musk described is already underway.

So why not just merge Tesla and SpaceX and make it official?

At Tesla, though it still acts like a high-growth company, its main revenue engine — car sales — and overall revenue are shrinking. Musk has acknowledged that Tesla’s future isn’t EVs, and he even moved to cut two of Tesla’s models from production recently.

Enter SpaceX, whose satellite internet business is booming and which is exploring other lucrative revenue streams.

Its valuation is surging: it was valued at $1.25 trillion last month, and now there’s speculation it could seek a valuation higher than $1.75 trillion.

If Tesla were to swallow up SpaceX, it could again become a growth story. (Or at least its stagnating car sales could be masked by stashing them among a growing business line.)

A merger wouldn’t just be about strategy; it would also enhance Musk’s control. He owns a much larger stake in SpaceX than he does in Tesla. In a stock deal, that ownership would convert into additional Tesla shares, increasing his influence over the combined company and giving him a firmer grip on its direction.

“My contrarian belief is I don’t think SpaceX will IPO,” SPAC king Chamath Palihapitiya said on his podcast last month. “I think that it will reverse merge into Tesla, and I think Elon will use it as a moment to consolidate control and power of his two seminal assets into one cap table.”

Just after we published this piece, Musk announced that his giant Terafab chip project would be — you’ll never guess — run jointly by Tesla and SpaceX.

The Takeaway

Consolidating power and control sure sounds like Musk — he combined Tesla and SolarCity in 2016, he combined X and xAI in March 2025, and he combined xAI and SpaceX just last month. And don’t forget: during the process of merging xAI and SpaceX, Bloomberg reported that SpaceX and Tesla were also considering a merger. And there may be no better regulatory environment for merging these two giant companies than now. The current administration is vocally hands-off on regulation, and it’s run by Donald Trump, who remains a pal of Musk’s despite their tiffs.