A possible merger between Tesla and SpaceX would be enormous by any standard. But with SpaceX potentially on the verge of what could become the biggest IPO in history, the timing is especially notable.

What’s happening?

CNBC reported that Elon Musk has spoken with colleagues about potentially combining Tesla and SpaceX into a single company. If that were to happen, it could create a Musk-led entity valued at more than $3 trillion.

SpaceX submitted its S-1 on May 20 and is slated to begin trading on the Nasdaq as SPCX on June 12, CNBC noted. The company is targeting as much as a $1.75 trillion valuation and roughly $75 billion in fundraising, which would make it the largest IPO ever.

Tesla, meanwhile, has a market cap of around $1.6 trillion. Put the two together, and the combined value would rise well past the $3 trillion mark.

CNBC reported that Wedbush analyst Dan Ives places the odds of such a merger are “80 to 90 percent” by early 2027. The report also notes Musk owns about 20% of Tesla’s equity while controlling 85.1% of SpaceX’s voting power through a super-voting share class.

Why does it matter?

Musk has already overseen several major transactions among companies he controls, including deals involving SolarCity, Twitter/X, and xAI. As Electrek reports, there are many reasons why Tesla investors and customers should be concerned about this trend.

A deal of this size could add uncertainty at a time when buyers are already weighing issues such as cost, reliability, charging access, and resale value.

A merger would not directly change the cars already on the road, but it could affect how management divides its time, capital, and strategic focus, with potential effects on pricing, software policies, service availability, and the pace of new products or updates.

Tesla remains one of the most visible electric vehicle brands in the United States, so any major shift at the company could influence confidence in the broader EV market. Investors are already suing Musk over his self-dealing when it comes to his xAI investment, per Electrek.

An Electrek commenter asked: “What more proof do the shareholders need that Musk treats Tesla (which is supposed to be a publicly traded company) like it’s his own?”

What’s being done?

As Electrek noted, Musk owns only 20% of Tesla. That theoretically gives shareholders some leverage to try to stop him from shuffling his own companies if they disagree with the value proposition.

However, it seems that Musk has been able to push through numerous moves despite shareholder opposition. Judged in that light, investors should be properly prepared for a merger to occur between Tesla and SpaceX if Musk is motivated to make the monumental move.

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