ISTANBUL
- Merger could cut spending through shared technology and infrastructure, but would increase risks, likely dilute Tesla shareholders’ stakes, Sino Auto Insights founder Tu Le says
A potential merger of Tesla and SpaceX could bring Elon Musk’s ambitions in artificial intelligence, robotics and space technology under one roof, but experts say shareholders would face greater risks.
Musk has backed the idea of bringing the companies together, saying special committees have been formed to examine a possible transaction. However, nothing has been agreed upon, and he has cautioned that a merger is not guaranteed.
A combination would unite Tesla’s electric vehicles, batteries and robotics with SpaceX’s rockets, satellites and space infrastructure, creating a business stretching from consumer transport to communications and space exploration.
David Bailey, a professor of business economics at the University of Birmingham, and Tu Le, founder and managing director of consultancy Sino Auto Insights, told Anadolu that sharing resources could offer advantages while concentrating decision-making under Musk.
Their assessments point to a central question: whether a merger would unlock benefits that the companies could not achieve by cooperating while remaining separate.
Combining technology under one roof
For Bailey, the strongest argument for a combination is the opportunity to bring together technologies and industrial expertise that could support Musk’s longer-term projects.
“The biggest prize would be combining Tesla’s expertise in batteries, robotics and manufacturing with SpaceX’s capabilities in rockets, satellites and space infrastructure,” he said.
“It could accelerate Musk’s ambitions in AI and autonomous systems. But much of this could be achieved through cooperation without the complexity of a merger.”
That distinction matters because technological overlap does not necessarily establish the need for common ownership. Shareholders would have to weigh any additional benefits against the costs and difficulties of integrating the businesses.
Le said a merger would make it easier to share technology, teams and resources, while giving Musk greater freedom to direct the companies.
“This merger consolidates power and allows Elon to control both entities under one roof,” he said.
Although there is likely considerable overlap between the businesses, their shareholders may have priorities that differ from Musk’s, potentially complicating decisions, particularly if one company loses value, Le added.
Bringing the businesses together could simplify those decisions, but would also place a wider range of activities under the same leadership.
Shared infrastructure could reduce spending
One potential attraction would be reducing capital spending by pooling infrastructure and technical capabilities.
Le highlighted opportunities to share data centers, chip design and satellite technology, suggesting that coordinated investment could offer savings for both businesses.
“The combined company could create a ton of value for its shareholders, but that’s not guaranteed,” he said.
The investment case would therefore depend partly on whether shared resources produce meaningful savings and new opportunities, rather than simply bringing more projects into a single company.
For Bailey, investors could gain access to growth opportunities across AI, robotics and space technology.
However, the price of a transaction and the risks being combined would be critical.
“The risk is that Tesla shareholders could end up paying a premium for SpaceX and taking on businesses with very different risk profiles,” he said.
Le similarly cautioned that combining with SpaceX would increase risk for Tesla investors and likely dilute their ownership stakes.
“Merging the companies would complicate two already complex businesses,” he said.
Investors would consequently need to assess what they receive in exchange for a smaller share of a larger business, and whether its prospects justify the additional complexity.
Control, valuation and China raise questions
A deal would also raise questions about how decisions are made and whose interests take priority when the businesses’ needs differ.
Bailey said a merger could strengthen Musk’s control over an even larger corporate empire, “raising questions about governance and whose interests come first.”
He identified valuation, corporate governance and conflicts of interest as the biggest obstacles.
“Tesla and SpaceX have different investors, business models and regulatory obligations,” Bailey said.
“The key question is whether a merger creates genuine value for shareholders or primarily serves Musk’s broader ambitions. I would be cautious about assuming a deal will happen.”
Le highlighted shareholder approval as a major hurdle and raised a separate question about the future of Tesla’s Shanghai factory.
He questioned whether a combined company might need to dispose of the plant, presenting this as a potential complication rather than an established requirement.
If a sale became necessary, finding a buyer could prove difficult because many automakers in China already face excess production capacity, he said.
In that scenario, potential buyers might only welcome additional capacity at a substantial discount, creating another challenge for the transaction.
Customer benefits could take time
For customers, the experts differed somewhat on how quickly a merger might deliver noticeable changes.
“For most customers, the immediate impact would probably be limited,” Bailey said.
“The real prize is the potential integration of AI, robotics, autonomous vehicles, satellite communications and space infrastructure.”
Le saw possible early benefits, including Starlink connectivity in future Tesla products and potential applications of SpaceX propulsion technology.
Nevertheless, he said the merger would be more significant over the longer term, linking Tesla’s capabilities to Musk’s ambitions beyond Earth.
“Elon could use Tesla technology to build a Mars rover and SpaceX rockets to get the rovers there,” Le said, describing that as Musk’s ultimate goal.
Bailey likewise emphasized the longer horizon.
“This is a long-term strategic play rather than something likely to transform the products customers buy overnight,” he said.
