Tesla (NASDAQ:TSLA) has staged an impressive recovery since reaching a multi-month low earlier this spring. The electric vehicle maker has climbed more than 30% since early April and is now trading near $440 a share, reclaiming levels that seemed distant only a few weeks ago.
Much of the recent optimism has centered on Tesla’s long-term opportunities in full self-driving technology, robotaxis, and the Optimus humanoid robot program. While those themes remain key pillars of the investment case, a new discussion is beginning to gain traction among investors—one that could dramatically reshape how Tesla is valued in the years ahead.
Speculation Around SpaceX Is Gathering Momentum
Recent weeks have seen growing reports suggesting Elon Musk has explored the idea of combining Tesla with SpaceX (NASDAQ:SPCX), his privately held aerospace and satellite business.
The prospect has captured attention because SpaceX is widely expected to pursue a public listing in the near future, in what could become the largest IPO ever completed. Any move linking the two companies would create one of the world’s largest and most influential technology enterprises.
Among those embracing the possibility is Wedbush analyst Dan Ives, one of Tesla’s most vocal supporters. In a recent research note, he estimated there is an 80% to 90% probability that a merger could occur by early 2027. According to Ives, Musk’s broader strategy increasingly revolves around controlling a larger portion of the artificial intelligence ecosystem, and integrating Tesla with SpaceX would represent a logical extension of that vision.
Musk’s Corporate Playbook Offers Clues
The theory carries weight not simply because of market speculation, but because of Musk’s history of linking his businesses together over time.
Beyond the frequent movement of engineering talent between his companies, Musk has repeatedly demonstrated a willingness to consolidate assets and operations across his corporate network.
Earlier this year, Tesla invested $2 billion in xAI, Musk’s artificial intelligence venture. That company had previously acquired X, formerly known as Twitter, after Musk purchased the social media platform. More recently, SpaceX acquired xAI, creating an increasingly interconnected web of ownership and strategic interests.
As a result, Tesla investors already have indirect exposure to SpaceX-related assets despite the absence of a formal merger.
The connections extend beyond ownership structures. The companies are also collaborating on the development of the Terafab semiconductor manufacturing facility, which is expected to produce advanced chips for multiple Musk-led enterprises.
Taken together, these developments suggest a growing level of integration that some investors view as groundwork for a larger corporate combination.
Why Supporters Find the Idea Compelling
For Tesla enthusiasts, the attraction of a merger is easy to understand.
SpaceX contributes a dominant launch business, the rapidly expanding Starlink satellite network, and access to AI capabilities through its links to xAI. Tesla, meanwhile, brings large-scale manufacturing expertise, energy storage operations, electric vehicle leadership, and ambitious robotics programs.
The resulting organization would combine capabilities across transportation, energy, communications, artificial intelligence, computing, and space exploration.
Dan Ives has described such a scenario as the “holy grail” of Musk’s empire-building ambitions. Viewed collectively, the assets would create an exceptionally broad technology platform spanning multiple high-growth industries.
Significant Obstacles Remain
Despite the excitement surrounding the concept, substantial hurdles would need to be overcome.
Questions persist regarding SpaceX’s reported valuation, with some critics arguing that estimates approaching $1.7 trillion are difficult to justify. Musk also faces the challenge of successfully executing a potential SpaceX IPO before contemplating a transaction of even greater complexity.
Prediction markets remain considerably more cautious than some Wall Street analysts. Current market-implied odds place the likelihood of a Tesla-SpaceX merger before May 2027 at roughly one-third.
Valuation concerns represent another challenge. Both companies command premium multiples, and any merger would involve complex negotiations around ownership, governance, and shareholder value.
Regulatory scrutiny would likely be intense, and a transaction of this scale could face legal challenges and resistance from investors on multiple fronts.
A Possibility Investors Cannot Ignore
Whether a merger ultimately materializes remains uncertain. However, the increasing financial, operational, and strategic connections between Musk’s businesses have made the discussion more difficult to dismiss.
For investors who believe in Musk’s long-term vision, the prospect of a deeper relationship between Tesla and SpaceX may no longer seem as far-fetched as it once did.
While many obstacles stand in the way, the idea has evolved from market rumor to a scenario that some on Wall Street are beginning to seriously consider.