Elon Musk has broached the prospect of combining SpaceX and Tesla in private discussions with associates, a report said on Tuesday. While no formal transaction has been announced, the two companies maintain extensive operational linkages and overlapping leadership that have made such a concept a subject of internal conversation.
Employees at Tesla have reportedly long speculated about a potential deal, and the topic is being discussed openly within the electric-vehicle maker. The firms already share resources and personnel in several areas, and close cooperation has been driven in part by common technical challenges - notably constraints around power and compute - that have pushed the companies to work closely together.
Capital spending patterns at each company underline the scale of recent investment and overlapping priorities. SpaceX reported $10.1 billion in capital expenditures in the first quarter, with more than three-quarters of that total attributed to AI-related spending. Tesla, for its part, disclosed in its most recent earnings update that it expects capital expenditures to roughly triple this year, rising to more than $25 billion.
Board composition and shared senior staff also tie the two organizations together. Elon Musk is a director at both companies; his brother Kimbal Musk and venture capitalist Ira Ehrenpreis likewise serve on both boards. Two SpaceX directors - Antonio Gracias and Steve Jurvetson - previously held seats on Tesla’s board, and Charles Kuehmann is listed as vice president of materials engineering for both Tesla and SpaceX.
The corporate relationship extends beyond governance. The companies have transacted with one another on multiple occasions. In January, Tesla disclosed a $2 billion investment in xAI; those Tesla-held shares became holdings in SpaceX after that company merged with xAI the following month. In a prospectus, SpaceX reported purchases of Tesla equipment and vehicles: $697 million of Tesla Megapack battery energy storage systems in 2024 and 2025 intended to power data centers owned and operated by xAI near SpaceX’s Colossus facilities in Memphis, Tennessee, and $131 million spent on Tesla Cybertrucks in 2025, bought at full manufacturer suggested retail price.
Prior transactions between the firms have included Tesla supplying solar equipment and automotive parts to SpaceX, Tesla’s use of SpaceX private jets, and a collaboration in which SpaceX assisted in developing a specialized alloy for the Cybertruck. Those interactions illustrate a history of material and service flows across the two businesses.
Compensation structures at Musk’s companies also reflect ambitious targets. SpaceX has tied a portion of Musk’s potential rewards to two milestones: reaching a $7.5 trillion market capitalization and establishing a human presence on Mars numbering at least one million people. Tesla shareholders approved a separate pay plan late last year composed of 12 tranches, each tied to market-cap milestones and operational achievements.
Following the report of internal discussions, Tesla shares moved slightly higher in after-hours trading on Tuesday. Separately, Musk is scheduled to begin SpaceX’s roadshow next week.
Note on scope: The information in this report is limited to the details described above. Where the underlying report did not provide further elaboration, this article does not extend beyond those facts.