What Musk said
During Tesla's Jul. 22, 2026 earnings call, Elon Musk stopped short of dismissing a merger with SpaceX. He cited a "growing overlap" between the two companies and emphasized that any deal would need to proceed through the "appropriate process." The remark has shifted conversations away from whether a tie-up could happen and toward how it might be executed.
Analysts' view
Following Musk's comments, some prominent analysts have moved to the forefront of the debate. Analysts such as Gene Munster now assign a roughly 90% probability to a Tesla-SpaceX combination, underscoring how market participants have begun treating a merger as increasingly likely rather than merely speculative.
Why Tesla's share price matters
A core strand of market conjecture centers on the mechanics of an all-stock merger. In that structure, a lower Tesla (TSLA) price would translate into SpaceX shareholders receiving more Tesla shares for each SpaceX share they hold. Compounding that arithmetic is the contrast in voting control: Musk controls approximately 82% of voting power in SpaceX, while his stake in Tesla is far smaller. A stock-based transaction thus could tighten Musk's control over a combined company if relative valuations move in that direction.
Recent financial results have intensified scrutiny of Tesla's valuation. The company reported Q2 EPS of $0.33 versus a $0.50 consensus - a 34% miss - along with operating income down 56.88% year-over-year and negative free cash flow of -$1.09 billion. Tesla shares dropped about 14.52% in the immediate aftermath of the earnings release.
Counterpoints and context
There is, however, no direct public evidence that Musk is deliberately engineering a lower Tesla stock price. Observers point to several practical counterarguments:
- Musk owns a meaningful amount of Tesla equity, so a material decline in the share price would reduce his personal net worth as well.
- Tesla's weak Q2 metrics reflect operational realities cited by the company itself - including falling free cash flow, elevated R&D spending connected to Semi, Optimus and Cybercab ramps, and pressure on auto margins.
- Operational convergence between the firms is already happening organically: Tesla supplies batteries and manufacturing know-how to SpaceX, and the two companies are cooperatively developing a semiconductor facility for AI chips called "Terafab."
Structural hurdles to a deal
Even with growing acceptance of a potential merger, several meaningful obstacles would need to be addressed:
- China regulatory risk - SpaceX's ties to the U.S. government create national security considerations that could concern Beijing, a major market for Tesla.
- Governance mismatch - Musk's far greater voting control at SpaceX compared with Tesla would reshape governance and could prompt resistance among Tesla stakeholders.
- SpaceX lockup expiry - On Aug. 6, an expiration allows the sale of up to roughly 911.5 million SpaceX shares, a development that could exert further pressure on SpaceX's market valuation.
- Tesla minority shareholders - Any merger would require approval from Tesla minority shareholders and could prompt fiduciary duty challenges in court.
Market signals and commentary
Tesla was trading at $309.24, down 1.21% on the day referenced in the earnings coverage. SpaceX is trading materially below prior reference points: about 16% below its IPO price of $135 and roughly 50% off its peak. The simultaneous pressure on both companies' valuations has sharpened debate over the relative attractiveness of a stock-based consolidation.
Industry analysts have weighed in on the operational side of the debate. JPMorgan described the integration between Tesla and SpaceX as already "deep," while Stifel said investors increasingly view the combination as inevitable, focusing attention on timing rather than possibility.
Bottom line
The prospect of a Tesla-SpaceX merger has moved from niche speculation toward mainstream market discussion, driven by Musk's comments, analyst probability estimates, and recent earnings that have pressured Tesla shares. That said, asserting that Musk wants Tesla to fall is a step beyond available evidence. A more measured conclusion is that Musk stands to gain from a relative valuation dynamic in which SpaceX looks inexpensive versus Tesla - a dynamic that Tesla's recent earnings results may have reinforced. Substantial regulatory, governance and shareholder hurdles would still need to be cleared before any transaction could proceed.