• Wedbush analyst Dan Ives assigns an 80-90% probability of a Tesla-SpaceX merger by early 2027, citing growing operational ties and a joint Terafab facility.
  • The merger would create a unified AI ecosystem, combining Tesla's automotive and energy businesses with SpaceX's aerospace and Starlink operations.
  • A potential SpaceX IPO is seen as a precursor, with Ives suggesting the groundwork for consolidation is already being laid.

Merger Momentum Builds

Wedbush Securities is doubling down on its bold prediction that Tesla and SpaceX will merge by 2027, with analyst Dan Ives now estimating an 80-90% probability of the deal. The call comes amid increasing chatter about SpaceX's long-awaited IPO and intensifying intercompany collaboration between Elon Musk's two flagship ventures.

"We believe a merger is not just possible but likely," Ives said in a note to clients. "The two companies are already deeply intertwined—Tesla holds a stake in SpaceX, they share supply chains, and the new Terafab facility in Austin is being designed to serve both entities. A formal combination is the logical next step."

The Terafab, a massive manufacturing plant under construction in Texas, is expected to produce components for both Tesla's electric vehicles and SpaceX's Starlink satellites and Starship rockets. Sources familiar with the project describe it as a "shared backbone" for Musk's industrial empire.

Ecosystem Play

Ives frames the potential merger as part of Musk's broader strategy to build an integrated AI and technology platform. Tesla's Dojo supercomputer and Full Self-Driving software could combine with SpaceX's Starlink satellite network and Starship launch capabilities, creating a vertically integrated AI giant spanning earth and space.

"This isn't just about cost savings," Ives noted. "It's about creating a unified ecosystem that can dominate AI, robotics, and space tech. A combined entity would have unmatched capabilities and could attract a valuation in the trillions."

The timeline hinges on SpaceX's IPO, which many expect as early as 2026. Wedbush believes an offering would set the stage for a stock-swap merger, with Musk retaining controlling interest through multi-class shares.

Skeptics and Hurdles

Not everyone is convinced. Critics point to governance challenges—SpaceX is private and largely controlled by Musk, while Tesla is a publicly traded company with independent directors. Antitrust scrutiny could also pose a barrier, though Wedbush downplays this risk.

"The main obstacle is structural, not regulatory," said a former SEC official familiar with both companies. "Musk essentially controls both entities, but any merger would require approval by Tesla's minority shareholders. They'll want to ensure they're getting fair value."

Wedbush acknowledges these concerns but argues that Musk's track record of consolidating ventures—such as Tesla's acquisition of SolarCity—demonstrates the playbook. "The market initially doubted SolarCity, but it ultimately paid off," Ives said. "We see a similar pattern here."

Market Reaction

Investors have taken note. Prediction markets show implied odds of a merger by 2028 hovering around 65%, up from 40% earlier this year. Tesla shares rose 2% on the Wedbush note, while SpaceX's valuation in secondary markets has climbed to nearly $250 billion.

Reached for comment, spokespersons for Tesla and SpaceX declined to address the speculation directly. "We don't comment on rumors or market chatter," a Tesla spokesperson said.

Correction: An earlier version of this article misstated the probability range as 70-80%. It has been updated to 80-90%.