Musk moves toward SpaceX-Tesla merger as Tesla's third-quarter profit falls 43%

Merger committees formed

On Tuesday, 20 October 2026, Elon Musk told SpaceX's earnings call that the two companies had formed special committees to weigh a deal combining SpaceX and Tesla. He called the idea a "good idea" but said he would not take part in the talks, because he has a conflict of interest as an interested party. He also warned that there is no certainty the companies will reach an agreement.

Obstacles include persuading enough Tesla shareholders to back the deal and winning approval from regulators, who would have to examine what would be the largest merger ever. Reports cited by ANSA say Musk wants to close the transaction during Donald Trump's second term, which would make US antitrust review simpler. The path looks harder in Europe and China, where Beijing views SpaceX's numerous contracts with the US government with strong suspicion.

According to analyst forecasts compiled by Visible Alpha, the combined group would employ about 155,000 people and generate revenue of $153bn this year, with negative free cash flow of at least $54bn. Its value at current prices is put at about $3.6 trillion. Musk controls about 84% of SpaceX votes through super-voting shares, compared with about 20% at Tesla, where each share carries one vote.

SpaceX and Tesla quarterly results

SpaceX reported third-quarter revenue up 161% to $14.6bn. Net profit reached $4.4bn, more than double the $2bn analysts had expected, against a loss of $1.1bn in the same quarter a year earlier. Capital spending rose to $19.6bn from $18.4bn in the previous quarter, with a significant share directed at artificial intelligence.

Tesla reported its own third-quarter figures on Wednesday, 21 October 2026. Revenue was $28.04bn, roughly level with $28.09bn a year earlier, while net income fell 43% to $787m from $1.37bn. Axios put revenue down less than 1% and said it missed expectations of $28.2bn, while The Verge reported a 4% profit fall and net income of $1.7bn, figures that do not match the other reports. Vehicle deliveries reached 486,532, below the same quarter of 2025, and energy storage revenue fell 16% to $2.8bn, which Tesla blamed on tariff-related customer refunds. Services revenue grew 33% to $4.6bn, and shares rose 1.7% in after-hours trading.

Optimus production and the Roadster

Tesla said it has begun production of its Optimus humanoid robot at its Fremont, California, factory, a space once dedicated to making electric vehicles. In its third-quarter letter to shareholders, the company wrote:

The bots coming off this line are the first production-quality bots that we have manufactured.

Rising spending on AI and Optimus weighed on profit even as services held up. Tesla also re-revealed the next-generation Roadster, a redesigned two-seat prototype that was flown and flipped in Waco, Texas, using cold-gas thrusters supplied by SpaceX. The reveal came nine years after the car was first announced, yet skeptics remain unconvinced it will enter production in 2028 as promised.

What remains open

Musk has said he cannot take part in the discussions, leaving the committees to shape any proposal. Tesla shareholders would have to back a deal, and regulators in the United States, Europe and China would have to clear what would be the largest combination of its kind. Whether the boards move forward will depend on those committees, on shareholder support and on approvals in several jurisdictions.