Tesla and SpaceX Merger Odds Rise to 90% After Earnings Call Comments

TLDR

• Analyst Gene Munster raised merger odds from 80% to 90% after Tesla’s Q2 earnings call
• Elon Musk acknowledged growing collaboration but deferred merger talk to “appropriate process”
• Prediction market Kalshi shows 41% chance of merger before March 2027
• Over $402,000 has been bet on the Kalshi “When will Tesla and SpaceX merge?” contract
• Tesla shares fell nearly 4% after Q2 profit missed estimates and free cash flow turned negative

Elon Musk was asked directly about a potential Tesla-SpaceX merger on Tesla’s second-quarter earnings call on Wednesday. He acknowledged growing collaboration between the two companies but said an earnings call was not the right place to discuss it.

“It’s got to be done with the appropriate process,” Musk said.

Analyst Raises Odds to 90%

Gene Munster of Deepwater Asset Management said he was surprised the merger question was even entertained on the call. He took it as a positive signal.

“Going into the call, I thought there was an 80% chance the two companies come together in the next few years. I’m raising that to 90%,” Munster posted on X.

Munster noted that Musk himself highlighted increasing overlap between the two companies, particularly around Terafab, a chipmaking venture both companies are backing.

The two companies already work together commercially. SpaceX uses Tesla’s battery storage systems for its AI data centers. Tesla has also integrated SpaceX’s Grok AI assistant into its vehicles and sold vehicles directly to SpaceX.

Space Exploration Technologies Corp., SPCX

Musk has previously spoken about his companies trending toward “convergence” in a post on X.

Prediction Markets Put Odds at 41%

Betting platform Kalshi, which is federally authorized, shows more than $402,000 wagered on the contract “When will Tesla and SpaceX merge?”

Bettors currently place a 41% probability on a merger happening before March 1, 2027. That rises slightly to 45% for before May 1, 2027.

Musk has a track record of merging his companies. He folded xAI into SpaceX ahead of its June IPO. In 2016, Tesla acquired Solar City and absorbed it into its energy division. That deal faced a major shareholder lawsuit, which was ultimately ruled in Musk’s favor in 2022.

SpaceX went public in June and briefly reached a valuation of $2.6 trillion. It has since lost as much as $1 trillion in market value, with questions around its valuation and expected insider sales.

Tesla shares dropped nearly 4% in after-hours trading on Wednesday. The company missed Q2 profit estimates and reported negative free cash flow.

SpaceX shares were also down over 6% on the day.

No formal merger proposal has been announced by either company.

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