Talks on a combination of Tesla and SpaceX have moved from whether a deal might happen to negotiations over price and control, and a deal could be announced as soon as December, which would make it the largest merger ever, Electrek reported, citing Bloomberg.
Neither company commented. Tesla's annual shareholder meeting is on Dec. 3, and the same directors who would sign off on a deal are up for re-election. December is the target, Electrek reported, but early 2027 is also on the table. One variable is how many SpaceX shares Tesla investors would receive. The structure taking shape, the report said, is SpaceX absorbing Tesla, not the other way around.
That tracks the valuations in the report: SpaceX is worth over $1.9 trillion after its June IPO, while Tesla sits around $1.5 trillion. For scale, the record for a single deal has long been Vodafone's $183 billion takeover of Mannesmann in 2000, and even SpaceX's roughly $250 billion purchase of xAI earlier this year would be dwarfed. Tesla stock rose as much as 1.9 percent on the report, Electrek said.
This is a report of talks, not a completed deal. The companies have not confirmed terms, a timeline, or a price.
Special committees, and a governance problem for Tesla holders
Musk first floated merging the two companies in May, weeks before the SpaceX IPO. In October, Tesla's proxy filing looked to Electrek like a board preparing for a SpaceX deal. Ira Ehrenpreis, who chairs Tesla's compensation and governance committees, has sat on SpaceX's board since February. The ballot for the Dec. 3 meeting is limited to re-electing Musk, chair Robyn Denholm, and JB Straubel to terms through 2029, plus a say-on-pay vote and the auditor. A day after the proxy, Musk confirmed that both boards had formed special committees to explore a merger.
Musk owns about 20 percent of Tesla but controlled roughly 85 percent of SpaceX's voting power through super-voting shares, according to its S-1, Electrek reported. Swapping Tesla shares for SpaceX shares would mean trading one-share-one-vote for a company where Musk's control is effectively locked in. The deal itself could also pay Musk. Under the change-in-control terms in his 2025 CEO award, operational milestones drop out and the market-cap test runs at the deal price, with earned shares vesting immediately. Based on the share count in the proxy, a deal valuing Tesla at $2 trillion — about a 33 percent premium to where it traded when the report was published — would clear the first market-cap tranche on the spot. His 286 million restricted shares from the 2018 package would also accelerate on a change in control, Electrek reported.
China, defense work, and a political clock
Bloomberg reported that one of the main obstacles is how to ring-fence Tesla's China business. A JPMorgan analyst described SpaceX's defense and government work and Tesla's China footprint as "key dynamics that are at odds with each other" for regulators and shareholders. That is the same issue behind a Wall Street Journal report in July that Tesla was weighing a sale or spinoff of its China operations, which Musk denied. Giga Shanghai is Tesla's most productive factory, builds more than half of its cars, and shipped 67,829 vehicles in October alone, Electrek reported.
Politics is the other wild card. Congress flipped to Democrats in the midterms, and they have said Musk's companies and his political ties will get a hard look. Bloomberg previously reported that the companies want to close before President Trump leaves office. Democrats do not take office until January, which is why a December target, if the report is right, would come before that clock runs out. Shareholders will have to weigh the valuation math against the control they would be giving up, and against a China business that is difficult to separate from a defense-heavy SpaceX.