Tesla and SpaceX Boards Form Independent Committees to Explore a Merger

Tesla and SpaceX are no longer just the subject of merger speculation.

The boards of both companies have formed special committees of independent directors to explore a possible combination, Elon Musk told investors Tuesday.

Musk said he supports the idea. He also stressed that no agreement has been reached and that a deal is not certain.

That distinction matters. This is a formal board-level review, not an announced merger.

The disclosure arrived during a blowout SpaceX quarter. One immediate market update captured the headline number:

JUST IN: Elon Musk's SpaceX $SPCX reports $14.58 billion in revenue for Q3 2026, beating expectations. pic.twitter.com/892DDb2Pr1

— Watcher.Guru (@WatcherGuru) October 20, 2026

SpaceX reported $14.58 billion in third-quarter revenue and $4.4 billion in net income, reversing a year-earlier loss. The result gives the merger question a very different scale than it had when SpaceX was still private.

SpaceX scheduled its third-quarter webcast for 3:30 p.m. Central on October 20 and streamed the event publicly on X. The merger disclosure came during that investor call, after the company released its second quarterly report as a public company.

The timing put investors inside two major Musk companies on consecutive days. Tesla is due to report its own quarterly results Wednesday, so shareholders will quickly get a second set of numbers for the businesses now under discussion.

Musk is not negotiating the deal himself.

He described himself as a conflicted party because he leads both companies and owns large stakes in each. The special committees are made up of independent directors, and Musk said he cannot participate in their discussions.

TechCrunch reported that the committees were formed at shareholders’ request. The outlet identified Tesla’s seven independent directors and SpaceX’s six, while noting that Musk, his brother Kimbal and SpaceX president Gwynne Shotwell are not considered independent for this process.

The same report said the committees have not agreed on transaction terms. Musk warned that assuming a merger is inevitable would overstate the situation.

The board overlap also deserves scrutiny. Ira Ehrenpreis serves on both companies’ boards and chairs key committees at each, while Tesla director James Murdoch has previously invested in SpaceX.

That overlap raises the standard for clear terms, independent advice and a record showing how each committee protected its own shareholders in practice.

Tesla is likely to be the harder side of the vote.

Musk said a combination would need support from 50% of all outstanding Tesla shares, rather than a majority of the shares actually voted. He called that a high hurdle.

Investors immediately began recalculating the odds:

Odds of $SPCX + $TSLA combo just inched up.

The question came up on the call. Elon says he thinks it’s a good idea, and there are a lot of merits to combining the companies, but shareholders still have to be supportive.

Believe me, shareholders would support this.

Elon says…

— Gene Munster (@munster_gene) October 20, 2026

Fortune reported that a combined Tesla-SpaceX would be worth roughly $3.5 trillion at Tuesday’s market prices. SpaceX was valued near $2 trillion and Tesla near $1.5 trillion, although any actual exchange ratio or transaction value would be determined much later.

The companies are already connected financially and operationally. Fortune noted Tesla’s disclosed $2 billion investment in SpaceX, overlapping directors and joint work on the planned Terafab chip-manufacturing project.

Tesla’s annual proxy, filed Monday, does not ask shareholders to vote on a merger. Any proposal would therefore come later, after the committees decide whether there is a transaction worth recommending.

The eventual price and share exchange would decide how much of the combined company each group owns.

Musk’s case for a merger is not about putting rockets in car showrooms.

He pointed to AI software, chips, robotics and connectivity as areas where the companies could work more closely.

Tesla brings factories, vehicles, energy storage and physical-world robotics. SpaceX brings launch systems, Starlink, orbital infrastructure and a rapidly expanding AI business.

Axios reported that Musk sees “a lot to be gained” from cooperation across those technologies. The outlet also emphasized his warning that there is no certainty of a deal and cited analyst Gene Munster’s view that shareholder support would ultimately carry it.

The technology pieces fit together. Making one fair company out of them will be harder.

Independent directors would have to decide whether the terms are fair to two different shareholder groups. Tesla investors would need to judge how much of SpaceX’s launch, communications and AI growth they want to own—and what they would be giving up to get it.

SpaceX shareholders would face the reverse question. They would be weighing a profitable, high-growth space and connectivity company against Tesla’s enormous manufacturing footprint, capital needs and exposure to the auto market.

The Associated Press reported that SpaceX’s AI operation became its largest division by revenue during the quarter, while Starlink remained its biggest profit generator. The company also told investors it plans to attempt catching both the Starship booster and ship on next month’s flight, a reminder that its valuation still depends on ambitious hardware milestones as well as software growth.

The AP put the earnings swing in sharp terms: $4.4 billion in quarterly profit after a year-earlier loss, with revenue up 161%. SpaceX shares rose 7.5% in after-hours trading as investors absorbed both the financial results and Musk’s merger comments.

That mix explains why this would not look like a conventional automaker buying a supplier.

It would combine two sprawling technology platforms under one public-company roof, with Musk at the center but formally outside the committee negotiations.

For now, the honest headline is also the biggest one: Tesla and SpaceX have opened the door.

Whether shareholders walk through it will depend on terms that do not exist yet.