Is Tesla’s High Valuation Solely Supported by SpaceX? Executives Don’t Rule Out a Merger, and Failed Expectations Threaten a Valuation Collapse

TradingKey - SpaceX ( SPCX )'s Gwynne Shotwell publicly stated in a recent interview that she has not ruled out the possibility of a future merger with Tesla ( TSLA ), while emphasizing that the strategic development directions of both companies are highly aligned.

Coincidentally, according to people familiar with the matter, Tesla CEO Elon Musk also recently discussed the feasibility of a merger between the two companies.

Successive statements from executives on both sides have significantly heightened market investors' focus on this potential mega-merger.

SpaceX and Tesla have become deeply intertwined operationally.

SpaceX and Tesla have long moved beyond a simple partnership, becoming deeply integrated across technology, resources, and supply chains.

According to SpaceX's prospectus, Tesla directly holds a portion of SpaceX's equity; following its investment in Elon Musk's AI startup xAI, Tesla also acquired an indirect stake in SpaceX. In February 2026, SpaceX completed its merger with xAI, bringing the Grok chatbot and the social media platform X into its ecosystem, with the merged entity's valuation reaching $1.25 trillion.

In terms of resource and business cooperation, the two companies have long shared core assets, including engineering talent, and are currently co-developing a chip-manufacturing project named Terafab.

Regarding commercial transactions, Tesla has sold approximately $890 million worth of vehicles and battery products to SpaceX and its subsidiary, xAI, since 2023; in 2025 alone, SpaceX purchased $131 million worth of Cybertruck electric pickups.

Assessing the potential for integration, SpaceX President Gwynne Shotwell confirmed that the two companies' development paths are indeed aligned, while making it clear that mergers and acquisitions represent a key strategic priority for the company, particularly in the AI sector.

SpaceX is reportedly holding an acquisition option for AI programming startup Cursor, in a deal valued at approximately $60 billion. Market observers believe that if the acquisition is finalized, it will further bolster SpaceX's capabilities in AI software and autonomous systems development, creating a more comprehensive industrial ecosystem alongside its satellite network, data centers, and robotics businesses.

Market analysts suggest that further integration between SpaceX and Tesla would yield a mega-tech conglomerate spanning space transportation, satellite communications, artificial intelligence, autonomous driving, robotics, and energy systems. However, with both companies already operating at a trillion-dollar scale, any merger plans would face complex hurdles regarding regulatory approval, corporate governance structures, and shareholder equity.

Wall Street is divided over the merger of the two companies.

Wall Street banks are divided over the potential merger of SpaceX and Tesla.

Among proponents of a merger, Wedbush Securities stated that Tesla and SpaceX, which is nearing an IPO, are highly likely to complete a blockbuster merger by early 2027.

The firm noted that SpaceX's IPO this summer is not the end game, but rather a move to pave the way for a subsequent merger between the two giants. Only by first tapping the capital markets to streamline its capital structure can this historic merger smoothly proceed, with the transaction window highly likely to fall in the first half of 2027.

According to the firm, the conditions for a merger are gradually maturing, elevating this thesis from mere market speculation into a steadily unfolding roadmap. Tesla's previous $2 billion investment in xAI was swapped for SpaceX equity after SpaceX completed its acquisition of xAI earlier this year. Although this represents an ownership stake of less than 1%, it marks the first direct capital link between the two companies.

On the opposing side, Oppenheimer argued that keeping the two companies independent better aligns with Musk's long-term AI strategy, as separate public listings offer more diversified and flexible financing channels.

Oppenheimer noted that Musk's long-term strategic vision in artificial intelligence heavily relies on diversified and flexible funding sources, and operating two public companies simultaneously is the most efficient way to bankroll this strategy.

However, the firm did not rule out a merger between Tesla and SpaceX entirely. It merely sees a near-term deal as unlikely, expecting instead that supply chain synergies in energy storage, servers, and data will continue to scale ahead of any potential transaction.

Oppenheimer pointed out that Tesla's stationary energy storage business would be the primary near-term beneficiary of a SpaceX listing. Tesla's energy storage technology could heavily support SpaceX's efforts to accelerate its computing power and power infrastructure, while boosting cash flow through data center leasing.

Overall, the core concern of those opposing the merger centers on the risk that Tesla could drag down SpaceX's valuation.

In terms of growth profiles and sector dynamics, SpaceX boasts a clearer growth trajectory and a scarcity-driven valuation premium, whereas Tesla operates in an increasingly competitive electric vehicle industry characterized by high capital intensity.

A merger could instead weigh on SpaceX's valuation performance, diluting the premium it commands from growing as an independent entity.

If the merger fails, Tesla could be "worthless"

Undoubtedly, if the two leading technology companies formally finalize the merger, it is bound to trigger significant volatility in both stock prices, creating a strong disturbance in market trading sentiment.

Well-known investor Ross Gerber recently made a clear assessment that if Tesla fails to complete its merger with SpaceX, its valuation framework will lose its core support and may even face a total collapse of its fundamental value.

Gerber believes that the market currently views the Tesla-SpaceX merger as a high-certainty event. One of the core motivations for shareholders holding Tesla stock is to secure a pathway for future investment in SpaceX, and this expectation is precisely the core logic supporting Tesla's current high valuation. In terms of valuation data, although Tesla's stock performance this year has lagged behind the other members of the "Magnificent Seven," with a cumulative decline of about 9%, its forward price-to-earnings (P/E) ratio remains as high as approximately 190 times, significantly above the industry average.

Gerber stated that Tesla has committed substantial computing resources, chips, and engineering teams to the development and construction of xAI, yet this entity remains independent of the Tesla ecosystem, meaning its equity and benefits do not belong to Tesla shareholders.

He further emphasized that Elon Musk has repeatedly stated that Tesla's valuation is anchored to the commercialization of Full Self-Driving (FSD). However, the intellectual property (IP) of FSD's core algorithmic "brain" is not fully controlled by Tesla. If a company does not own the underlying IP of its core product, its long-term growth prospects will face significant uncertainty.

Although the businesses of Tesla and SpaceX have long been closely intertwined, no specific timeline for a merger has been finalized, and the risks associated with the mismatch between its high valuation and underlying fundamentals continue to mount.

If the two companies eventually complete the merger, it would achieve deep synergy across computing power, chip R&D, and autonomous driving technology, shore up Tesla's vulnerability regarding FSD's underlying intellectual property, and solidify its long-term value foundation. However, if there is no substantive progress on the merger and market expectations are dashed, the high valuation—unsupported by financial performance—will face the risk of a sharp correction.