For analysts and investors, a Tesla-SpaceX merger isn't a question of if, but when. Still, there are a few questions to answer before Elon Musk's trillion-dollar companies can become a vertically integrated artificial-intelligence behemoth.
The three biggest issues are "premium, vote, and China," said BofA analyst Alexander Perry.
Most analysts see SpaceX as the acquirer, paying a premium in an all-stock deal. But how much? RBC analyst Tom Narayan believes $480 per Tesla share would get a deal done. Perry sees a 20% to 30% premium, which would push Tesla stock up closer to $500, just beyond its all-time high.
After price, there is the Tesla shareholder vote to consider. Most of the time, Tesla investors side with CEO Musk -- just remember his 2025 trillion-dollar stock award, which roughly 75% of Tesla voted in favor. But a 2025 non-binding proposal to invest in xAI -- which merged with SpaceX in early 2026 -- failed despite getting more yes votes than no votes. "Tesla's charter requires approval from a majority of all outstanding shares, with abstentions and broker non-votes counting against a deal," added Perry in a report Thursday.
More than the vote, China looks to be the toughest hurdle to completing a merger.
A Tesla-SpaceX merger would be the largest deal in U.S. history, surely drawing scrutiny of regulators around the globe. China represents the "main regulatory risk," added Perry. "As a potential deal would place Tesla's Shanghai plant, which builds roughly half of its global vehicle output, under a major U.S. defense contractor."
Chinese regulators effectively killed the 2018 proposed merger between Qualcomm and NXP Semiconductors. It also held up the 2023 deal between Broadcom and VMware.
Perry believes a merger could add "incremental upside" to Tesla stock, with shared AI infrastructure the main deal synergy. SpaceX uses AI computers to create digital applications. Tesla uses AI computers to train cars and robots.
Tesla stock was down 2.4% in premarket trading on Friday at $393.42. SpaceX shares were down 3.1% at $139.40. The market was weak after disappointing earnings from Amazon.com and Intel. S&P 500 and Nasdaq Composite futures were off 1% and 2.3%, respectively.
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