Elon Musk Confirms Talks For Potential SpaceX-Tesla Merger

(RTTNews) - Elon Musk, the CEO of both Tesla Inc. and Space Exploration Technologies Corp. or SpaceX, has confirmed the discussion for potential merger of the electric vehicle major and the spaceflight company.

During the third-quarter earnings call of SpaceX, a company he founded, Musk called it to be a good idea, adding that the companies have formed special committees to discuss the possible union. However, they have not reached agreement on the terms of any transaction and that there is no guarantee that they will, he added.

Following the news of potential SpaceX-Tesla merger as well as SpaceX's turnaround in third quarter, SpaceX shares were gaining around 8.94%, trading at $161.00, while Tesla is gaining 2.47%, at $382.93.

During the call, Musk also said he expects SpaceX annual recurring revenue by the end of fiscal 2027 to be somewhere between $500 billion and $1 trillion, with surging demand for its data-center space amid AI boom.

Regarding the possible merger plan, Musk said, "both SpaceX and Tesla have formed special committees to discuss this idea at the request of shareholders. And these special committees are consist of independent directors. And because I'm a conflicted party, I can't actually be in the discussions of the special committees.... Do I think it would be a good idea, yes. But at the end of the day, the shareholders have to be supportive of this."

From Tesla side, the plan needs a 50 percent vote of all shares of all shareholders. According to Musk, its quite a high hurdle to try to achieve.

"I do think there's a lot of merit to combining the companies as we are pretty much in the super intelligence singularity. And -- and there's a lot to be gained from cooperating on developing super intelligent software, chip design, the Terafab, obviously, robotics, mass to orbit with the Starmind constellation," Musk added.

Earlier, SpaceX, for the first time as a public company, announced third-quarter net income of $4.40 billion, an improvement of $5.5 billion from prior year's net loss of $1.05 billion. Revenues grew 161 percent to $14.58 billion, fueled by Super Intelligence segment and accelerated growth in Connectivity.

Tesla is scheduled to report results on Wednesday, October 21, after market close.