SpaceX-Tesla Talks Advance as Connectivity Revenue Jumps 69% in Third Quarter
Key Facts
Talks between SpaceX and Tesla over a possible combination of their businesses are advancing, but there is no definitive agreement or confirmed announcement date, Bloomberg reported, as cited by Yahoo Finance. SpaceX disclosed that it had formed a special committee to evaluate a possible combination, while Tesla said a committee of independent directors is considering a deeper relationship between the companies, which could include a transaction to combine the businesses. The discussions come as third-quarter results showed sharply divergent revenue trends at the two companies, with SpaceX connectivity revenue growing and Tesla’s total revenue edging down. SpaceX said in its filing that "the Special Committee has made no decision with respect to any potential combination." Tesla also said that any transaction is "not guaranteed" and would require the committee’s recommendation and the necessary shareholder approvals.
Bloomberg said the talks are advancing and an announcement could come in December, though the companies have also discussed the possibility of it slipping to early 2027. Advisers and both boards are working on terms and governance, according to the report, while the official disclosures do not establish that an agreement has been reached. An announcement in December therefore remains a possibility under discussion, not a date approved by the companies. When the committees were formed in October, Elon Musk said it would be an overstatement to describe a merger as certain. The Associated Press quoted him as saying: "I think that would be an overstatement."
On financial performance, SpaceX connectivity revenue rose 69% year over year in the third quarter of 2026. The company attributed the growth to an increase in Starlink subscribers, alongside momentum in adoption of its services by businesses and government entities. The expansion in connectivity services is one part of SpaceX’s business in the background to the discussions, but it does not on its own determine the value of any potential transaction. Tesla, meanwhile, reported total revenue of 28,046 million dollars in the third quarter, compared with 28,095 million dollars in the same period of 2025. The year-over-year decline was 49 million dollars, while the company’s table showed a rounded change of "—%."
Tesla’s revenue components reveal opposing movements across its businesses. Revenue from energy generation and storage fell 534 million dollars, or 16%, in the third quarter compared with the same period a year earlier. The company said the decline was tied to tariff refunds to some Megapack customers, a lower average selling price per unit, and reduced Powerwall and solar deployments; higher Megapack deployments partially offset the impact. By contrast, services and other revenue increased 1.13 billion dollars, or 33%, driven by used vehicle sales and pricing, out-of-warranty maintenance services, and revenue from paid charging sessions. These items show the different sources of change within Tesla, without the company linking them to its review of a possible combination with SpaceX.
Tesla’s automotive sales revenue also declined as cash deliveries fell by about 2% year over year in the third quarter. The company attributed this to lower deliveries after it ended production of the Model S and Model X in mid-2026. A weaker dollar and higher FSD subscription revenue offset part of the impact, according to its report. This reflects a contrast between growth in SpaceX connectivity revenue and pressures on some of Tesla’s businesses, alongside an increase in its services revenue. The companies have not said that the difference in financial performance is a reason for considering a combination, and their disclosures do not explain how these trends would affect the terms of any potential transaction.
SpaceX shares closed at 139.94 dollars on November 12, while Tesla shares closed at 397.45 dollars on the same day, according to EL7 data. At the next nearby milestone, Tesla set its annual shareholder meeting for December 3, 2026. Investors may watch the meeting in light of reports about a possible announcement timeline, but the company’s notice does not confirm that a deal will be announced at the meeting. Any transaction remains subject to a recommendation from Tesla’s committee and the necessary shareholder approvals, and completion is not guaranteed. As for the timing of an announcement, Bloomberg’s account points to the possibility that it could extend into early 2027.