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Why does Elon Musk want to merge Tesla and SpaceX?

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Why does Elon Musk want to merge Tesla and SpaceX?

Elon Musk has spent years building Tesla and SpaceX into a pair of trillion-dollar technology empires. Now, he is considering bringing them together.

Asked on Tuesday whether a merger would be a good idea, Musk was clear: "Yes."

The prospect is more than hypothetical. Musk said special committees have been formed to assess a potential deal, although he stressed that there is no guarantee a merger will happen and that nothing has been agreed.

With Tesla valued at roughly $1.5tn (£1.1bn) and SpaceX at $2tn (£1.5bn), a combination of the two companies would mark the largest merger ever.

Any deal would also need shareholder backing. But Musk said he saw "a lot to be gained" in bringing the businesses together.

"In my opinion, 100%. It's just a question of when," says David Nicholson, the Chief Technology Advisor at The Futurum Group, a market research company.

The unveiling of the Tesla Roadster last week - a futuristic electric car powered by SpaceX rocket thrusters - served as a "symbolic embodiment" hinting at the two Musk companies merging, Nicholson said.

Musk, the CEO of both SpaceX and Tesla, said bringing the firms together would be beneficial given the work each does around chips, artificial intelligence (AI) and other technology projects.

Specifically, the deal would combine Tesla's cars, robots and self-driving technology with SpaceX's rockets, data centres, satellites and telecommunications operations.

The move could be a step towards Musk's mission to build a self-sustaining city on Mars - a vision that has invited sceptics but also plenty of backers.


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