Musk May Promote the Merger of SpaceX and Tesla to Create a $4 Trillion Tech Group

According to The New York Times, on June 18, after SpaceX completed the largest IPO in history, Wall Street speculated that Elon Musk's next move could be merging SpaceX with Tesla, forming a technology group valued at around $4 trillion. Investors, analysts, and SpaceX executives have all publicly discussed the benefits of such a deal. The two companies have long shared executives and resources, and have jointly developed projects worth billions of dollars.

Since Musk controls both SpaceX and holds the largest stake in Tesla, a merger would essentially be a transaction with himself, potentially sparking legal action. However, legal experts point out that both Tesla and SpaceX are registered in Texas, where corporate law requires shareholders to own at least 3% of the shares to sue. Based on Tesla's current $1.5 trillion valuation, dissenting shareholders would need to hold $45 billion in shares, setting an extremely high threshold. Charles Elson, a corporate governance expert at the University of Delaware, noted that Musk "can almost do whatever he wants."

If the merger goes through, it's expected that the larger SpaceX would acquire Tesla through a share swap. The new group's business would cover rocket manufacturing, artificial intelligence, Starlink satellite internet, electric vehicles, battery production, solar hardware, and the social media platform X. It would also include cutting-edge projects such as orbital data centers, self-driving taxis, and humanoid robots.

Under Texas law, Tesla would need approval from two-thirds of its shareholders for the merger. Musk currently controls about 20% of the voting rights, with most other shareholders highly supportive—having recently approved his nearly $1 trillion compensation plan. Tesla's board has long backed Musk, and SpaceX just appointed his former PayPal colleague Roelof Botha to its board on Wednesday.

SpaceX President Gwynne Shotwell did not deny merger rumors, telling CNBC last week that a merger "might make Elon's life a little easier" and admitting the two companies "have synergies." SpaceX regulatory filings also acknowledge the possibility of a merger while warning of integration challenges. Currently, Musk holds over 82% of the voting power at SpaceX due to his special shares with 10x voting rights; thus, he alone could approve the merger.

ARK Invest Director Tasha Keeney believes Tesla’s semiconductor and data center expertise aligns with SpaceX’s space data center plans but hopes to see Tesla’s self-driving taxi business mature first. Although lawyers and politicians may attempt to block the deal, experts point out that as long as the companies operate well and share prices keep rising, securities fraud lawsuits are unlikely to succeed. In theory, federal regulators could object on antitrust or national security grounds, but given the close relationship between the Trump administration and Musk, US regulatory resistance is expected to be limited.