Elon Musk Confirms SpaceX-Tesla Merger Review with Combined Market Capitalisation of Around $3.5 Trillion

Elon Musk confirmed on 21 October 2026 that SpaceX and Tesla are officially reviewing a merger. Both companies are forming special committees to discuss the deal, according to the New York Times and Los Angeles Times. The combined market capitalisation of the two groups amounts to approximately $3.5 trillion (roughly €3.1 trillion at the ECB reference rate from 21 October 2026), which would make the merger the largest corporate transaction in history.

Valuation of Individual Companies

SpaceX is currently valued at $2.14 trillion (€1.9 trillion), while Tesla has a market capitalisation of $1.52 trillion (€1.35 trillion). At a typical acquisition premium of 30 percent on Tesla's stock value, SpaceX would need approximately $1.98 trillion (€1.76 trillion) to acquire Tesla. Fortune analysed that this would effectively be a merger between equals.

Musk would own roughly one-third of the combined company, according to Fortune. His personal wealth has fluctuated significantly recently: Forbes reported on 9 October 2026 that Musk had regained billionaire status. However, by 13 October his net worth had fallen to $977.2 billion after SpaceX shares lost value. A large portion of his wealth is tied up in shares subject to a one-year post-IPO lock-up period.

Existing Business Relationships

Close connections already exist between the two groups: SpaceX purchases Tesla Megapack batteries and Cybertrucks. Tesla invested $2 billion in xAI, which SpaceX acquired in February 2026. Both companies are jointly involved in the Terafab chip project.

The planned merger would bring together Musk's interests in aerospace, electric vehicles and artificial intelligence under one roof. The merged entity would encompass aerospace technology, electric vehicles, battery technology, artificial intelligence and semiconductor manufacturing.

Criticism from Analysts and Shareholders

Several analysts doubt the feasibility of the merger. Fortune writes that "the merger maths don't add up". Business Insider compares the potential conglomerate to "Frankenstein's monster", which investors "would hardly understand and be able to value". Another Fortune analysis calls the merger a "nightmare for SpaceX shareholders".

According to Fortune, Tesla shareholders present the biggest hurdle for the deal – more so than Musk himself. The complexity of the valuation and investor scepticism remain unresolved as of 22 October 2026.

US markets showed a mostly positive tone on Monday, 21 October 2026, until 2:00 pm CEST: the S&P 500 was trading at 7,757.17 points (up 0.58 percent compared to the previous day's close), while the Nasdaq Composite rose 1.05 percent to 26,702.86 points.