Business & Politics · 6 Intermediate · October 21, 2026

Elon Musk Eyes Merger of Tesla and SpaceX

Photo: SpaceX via Pexels

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Vocabulary

shareholder ˈʃɛrhoʊldər noun

a person or organization that owns shares in a company

Each shareholder has the right to vote on major company decisions like a merger.

merger ˈmɜrdʒər noun

the combination of two companies into one

The merger between Tesla and SpaceX would create one of the largest companies in the world.

acknowledge ækˈnɑlɪdʒ verb

to admit or recognize that something is true or exists

Musk acknowledged it would need approval from shareholders before proceeding.

valued at ˈvæljud æt verb phrase

estimated to be worth a particular amount of money

Tesla is valued at roughly $1.5 trillion, making it one of the most valuable companies.

collaborate kəˈlæbəreɪt verb

to work together with others on a project or task

SpaceX and Tesla collaborate on technology through their joint manufacturing effort called Terafab.

profitable ˈprɑfɪtəbəl adjective

making or likely to make money or produce a financial gain

SpaceX's cloud computing business has become its most profitable division, earning $7.5 billion quarterly.

Article

Elon Musk, who leads both Tesla and SpaceX, is considering merging his two companies. He told financial analysts that he believes the combination would be valuable, though he acknowledged it would need approval from shareholders and cannot be guaranteed. Special committees within both companies have already begun examining whether such a deal makes sense.

A Massive Scale

The potential merger would be one of the largest in history. Tesla is valued at roughly $1.5 trillion, while SpaceX is valued at $2 trillion. If combined, the companies would represent a company worth over $3.5 trillion. Musk noted that shareholders own the final decision, and at least 50 percent of Tesla investors would need to approve the move, which he described as a significant challenge.

Reasons for Combining Forces

Musk sees practical benefits in merging the two companies, particularly regarding their work in artificial intelligence, software, and computer chips. SpaceX has recently launched Terafab, a joint manufacturing effort with Tesla, suggesting the companies already collaborate on technology. SpaceX's cloud computing business has become its most profitable division, earning $7.5 billion quarterly, while the company as a whole currently loses money overall.

Discussion Questions

Why do you think Musk believes combining Tesla and SpaceX would help both companies accomplish their work in technology and artificial intelligence?
What challenges might shareholders face in deciding whether to approve a $3.5 trillion company merger?
SpaceX's cloud computing business is profitable, but the company as a whole loses money. How might merging with Tesla change this situation?
Musk called himself a 'conflicted party' in the decision. Why is it important for independent committees, rather than Musk alone, to evaluate this merger?
Would you invest in a combined Tesla-SpaceX company? What questions would you want answered before making that choice?

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