According to CNBC on Tuesday, Elon Musk has discussed the possibility of merging SpaceX and Tesla with colleagues. The two companies are already sharing resources and personnel. Reports indicate that many employees at the electric vehicle maker have long expected some form of merger agreement between the two companies, and the topic has reportedly been openly discussed internally.

As Musk’s companies face common challenges surrounding electricity supply and computing resources, collaboration between his businesses has become increasingly close. SpaceX reported total capital expenditures of US$10.1 billion during the first quarter of this year, with more than three-quarters related to artificial intelligence initiatives. Tesla stated in its latest earnings report that its capital expenditures this year are expected to nearly triple, surpassing US$25 billion. Business transactions between Musk’s companies have existed for years. In January this year, Tesla announced a US$2 billion investment into xAI. The following month, xAI merged with SpaceX, resulting in those shares becoming part of SpaceX’s holdings.

Musk currently serves on the boards of both companies, alongside his brother Kimbal Musk and venture capitalist Ira Ehrenpreis. SpaceX board members Antonio Gracias and Steve Jurvetson previously served on Tesla’s board as well. Meanwhile, Charles Kuehmann simultaneously serves as Vice President of Materials Engineering at both Tesla and SpaceX.

In its prospectus filings, SpaceX disclosed that between 2024 and 2025, the company spent US$697 million purchasing Tesla Megapack battery energy storage systems to power data centers owned and operated near xAI’s Colossus facility in Memphis, Tennessee. In addition, SpaceX also purchased US$131 million worth of Tesla Cybertrucks in 2025 at full suggested retail pricing.

The two companies have collaborated in other areas previously as well. Tesla has sold solar equipment and automotive components to SpaceX, Tesla has used SpaceX private aircraft services, and SpaceX has assisted Tesla in developing specialized alloy materials for the Cybertruck.

Market Analysis:

SpaceX has tied Elon Musk’s compensation incentives to two major milestones: SpaceX reaching a market capitalization of US$7.5 trillion, and the establishment of a Mars colony with at least one million residents. Meanwhile, Tesla shareholders approved a compensation package late last year structured around 12 separate milestones, with each reward tied to market capitalization growth and operational achievements.

Following publication of the report, Tesla shares moved modestly higher. Musk is expected to begin SpaceX’s upcoming roadshow activities next week.