Tesla’s Flying Roadster Has Wall Street Talking About SpaceX, Not Cars

One of the longtime critiques of big tech companies goes something like, "If they're really so good at making technological advancements, why don't we have flying cars yet?"

Well, last night, Tesla (NASDAQ:TSLA) stepped up to the challenge at the unveiling of its rebooted Roadster, which did, in fact, fly.

This jaw-dropping engineering feat, however, seems to have done less to spark interest in the Roadster than it has to spark interest in a Tesla merger with CEO Elon Musk's other company, Space Exploration Technologies (NASDAQ:SPCX), or SpaceX.

Here's what happened at the unveiling and why "Flying Car!" isn't the biggest news to come out of last night's spectacle.

Image source: The Motley Fool. Image source: The Motley Fool.

A one-of-a-kind show

Although the unveiling had originally been scheduled for two weeks ago, Tesla had to call it off due to bad weather at the demo site, SpaceX's Rocket Development and Testing facility in Waco, Texas. The blaming of bad weather fueled speculation that the Roadster would use SpaceX's cold-gas thrusters to hover or fly.

The rumors were correct, but that wasn't all that happened.

First, the white, wedge-shaped demo Roadster drove up a multi-story vertical ramp, reminiscent of an inverted roller coaster. It was able to cling to the ramp using a vacuum fan system.

Then it launched upside-down, did a midair barrel roll, and used the aforementioned cold-gas thrusters to right itself and land. Later, it performed a powered jump over a lineup of other Tesla vehicles, including a Semi, while performing another airborne rotation and a thruster-assisted landing. "It can basically fly like a rocket," Musk commented.

The car also went from 0 to 60 mph in just 0.81 seconds, said Musk, much faster than any Tesla vehicle has previously recorded.

No, you can't have one

Perhaps unsurprisingly, the flying version of the car isn't available for sale. Even the non-flying version of the rebooted Roadster, which was first announced in 2017 and originally slated for delivery in 2020, isn't going to enter production until 2028, according to Musk.

Tesla outlined three configurations for the vehicle:

• a two-seat Performance model with a suction system;
• a two-seat Thrust version, which would add the rear-mounted thrusters; and
• a single-seat Rocket variant with perimeter thrusters that would enable upward acceleration and rotation, which the company claims could go from 0 to 60 mph in under 0.59 seconds – an acceleration speed that could cause the driver to pass out.

Making a flying car commercially available would also run into unresolved issues with the Federal Aviation Administration (FAA).

No wonder many observers shrugged off the spectacle. Henry Catchpole, the host of Hagerty's "The Driver's Seat," for example, praised the engineering achievement but noted, "How it all translates into a finished, usable, enjoyable road car for enthusiasts remains to be seen."

Deepwater Management's Gene Munster called the presentation "an engineering flex with no commercial value beyond embarrassing traditional car makers," in an X post. But he went on to suggest that it was also evidence that "Elon can't wait to bring TSLA and SPCX together."

Image source: The Motley Fool. Image source: The Motley Fool.

Merger speculation intensifies

With no product available to evaluate and no final price tag to discuss (the Performance variant requires $50,000 in deposits, while the Thrust requires $250,000, though neither is expected to be the final price), analysts turned to speculating about a SpaceX-Tesla merger.

The shared engineering on the demo Roadster was just another example of the companies' intertwined operations and finances. SpaceX reportedly bought $318 million worth of Tesla Megapacks during Q2, while Tesla picked up $2 billion in SpaceX shares in Q1. The companies are also collaborating on the proposed Terafab semiconductor project, which could cost up to $119 billion.

Analysts have argued that combining the businesses could help the companies simplify decisions about shared technology, better manage data and AI use, and even allow for co-development of a unified engineering platform.

Many expect a Tesla–SpaceX merger announcement soon. Barclays expects one within weeks, while analyst Dan Ives of Yorkville Ives pegs the probability of a merger before the end of 2027 at approximately 80%.

Prediction markets agree. After the demonstration, the odds of a merger happening before April 2027 climbed from 30% to 55% on Kalshi.

Regardless of the merger buzz, investors should remember that neither company has said anything about even considering a merger. Such a deal would also require shareholder approval and heavy regulatory scrutiny. Even if a merger were officially proposed, it would be far from a done deal. It would be premature for investors to trade based on these rumors.

But hey, at least we now have some amazing flying-car footage to look at.

John Bromels has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.