Musk says Tesla and Space X have increased business overlap and does not rule out possible merger
CEO Musk said on Wednesday that he would not rule out the possibility of merging Tesla with SpaceX, another company with a market capitalization of more than a trillion dollars, and said that the business overlap between the two companies is increasing. "As you've seen from Tesla's work with SpaceX in so many areas, there's increasing overlap between the two companies," Musk said on Tesla's earnings call. "We can't discuss things like corporate mergers on earnings calls," he added. "Such matters must be completed in accordance with appropriate procedures." Investors and analysts have long speculated about a potential merger between Musk's two companies. Discussions heated up further as SpaceX launched its record-breaking $75 billion initial public offering (IPO). Tesla currently provides batteries and manufacturing technology for some of SpaceX's projects, and the two parties are also jointly developing a semiconductor manufacturing plant called Terafab, designed to produce artificial intelligence (AI) chips. Supporters of the merger believe that integrating the two companies will help simplify Musk's business landscape and create a comprehensive enterprise spanning artificial intelligence, robotics, advanced manufacturing, energy and space infrastructure. Others warn, however, that any merger deal could face significant hurdles. The two companies need to obtain regulatory approvals, which could pose a "realistic bottleneck," the research note said. Analysts also pointed out that Musk’s voting power in SpaceX is much higher than his shareholding influence in Tesla, which also brings complex corporate governance issues to shareholders of Tesla’s listed companies.