Tesla and SpaceX explore merger as Musk says 50% shareholder backing required
Key Facts
Elon Musk confirmed that Tesla and SpaceX had formed independent special committees to explore a potential merger, saying approval at Tesla would require support from 50% of all shares, according to Investing.com. His comments came on Tuesday as SpaceX reported quarterly results, with negotiations between the two sides still at an early stage. Musk described the potential merger as "a good idea," with any decision subject to the necessary approvals. But he acknowledged his conflict of interest, explaining that he was excluded from the committees' discussions and saying: "I can't participate in the conversations." No deal terms have been finalized, according to the website, and there is no guarantee the ongoing discussions will lead to a merger agreement between the two companies.
SpaceX reported revenue of $14.6 billion for the third quarter of 2026, according to its earnings disclosure filed with the U.S. Securities and Exchange Commission. Revenue rose 161% from $5.6 billion in the third quarter of 2025, marking a substantial year-on-year increase in business volume. The total exceeded Visible Alpha analysts' expectations of about $12.86 billion, according to Fortune, which cited their estimates for the same period. The company posted quarterly net income of $4.4 billion, according to the official earnings disclosure. The superintelligence segment alone generated revenue of $7,560 million during the quarter, among the businesses whose performance the company detailed in its quarterly results.
SpaceX cited cloud services agreements among the drivers of growth in its artificial intelligence business, according to the earnings disclosure, which also covered the company's spending on its activities during the period. The company listed the acquisition of Cursor among the factors contributing to growth in this business during the third quarter of 2026. On investment, total capital expenditure reached $19,593 million in the same quarter, according to figures in the disclosure. The superintelligence segment accounted for $16,444 million in capital expenditure, the largest share of the company's reported total for the quarter. In the Starlink business, individual subscribers reached 13.6 million at the end of September, according to the same business performance disclosure.
Explaining Tesla's shareholder approval requirements, Musk stressed that the required percentage was calculated against total shares, according to the SpaceX earnings call transcript published by Investing.com. He said: "We will need a vote of 50% of all shares, not just the shares of those who participate in the vote, but the shares of all shareholders." The current merger discussions were preceded by a direct equity link between the companies through an investment Tesla made in SpaceX shares this year. Tesla completed the investment on 12 March 2026, according to its amended annual filing with the U.S. Securities and Exchange Commission. The investment totaled about $2.00 billion to purchase Class A common shares in SpaceX, according to the filing, which specified the share class and the transaction's completion date.
In market trading, Investing.com reported a 2.2% rise in Tesla shares following Musk's comments on the potential merger. The stock reached $382.15 in after-hours trading on Tuesday, 20 October 2026, according to the website's report. On Tesla's operations, the company reported production of 464,391 vehicles during the third quarter of the year, according to its investor relations statement on production and deliveries. Deliveries totaled 486,532 vehicles in the same quarter, according to the statement, which the company released ahead of its financial results. Tesla therefore delivered more vehicles during the quarter than it produced in the same period, according to the reported production and delivery totals.
Cooperation between Tesla and SpaceX extends to the Terafab chip manufacturing project, which aims to reach high-volume production by the third quarter of 2028, according to Musk. Reuters, via Investing.com, reported this target date for expanding chip production at the companies' joint project. Musk cautioned that the timeline was uncertain, saying: "We don't know whether we will actually achieve that or not." Tesla set the date for its next financial milestone in its investor relations statement, which announced the timing of its third-quarter 2026 results. The results are scheduled for release after the market closes on Wednesday, 21 October 2026, following the company's publication of quarterly vehicle production and delivery figures.