Musk's own words may slow the deal he likes. Elon Musk's public endorsement this week of a potential $3.5 trillion merger between SpaceX and Tesla has rattled some insiders involved in the discussions, who worry it could invite shareholder scrutiny and delay the process by several weeks, Reuters reported on Thursday, Oct. 22, 2026, citing a person with direct knowledge of the talks.
The disclosure created a "mess" for the process because it could raise questions about how well Tesla shareholders' interests are represented, the person told Reuters. Tesla, SpaceX and Musk did not respond to Reuters' requests for comment.
Where the talks stand, per Reuters
- The parties have hired advisers, but discussions are at an early stage, three sources said.
- SpaceX approached Tesla in recent weeks. Structures under discussion include a SpaceX acquisition of Tesla or a merger under a newly formed holding company, and the sides are weighing forms of consideration including an all-stock deal.
- Advisers are in contact with Musk's lawyers to make sure he is recused from the special committees' discussions.
The SolarCity shadow
Some participants see parallels with Tesla's 2016 SolarCity acquisition, which led to years of litigation over Musk's role. Courts ultimately upheld that deal as fair, and Tesla directors settled related allegations for $60 million, Reuters noted. Columbia law professor Eric Talley told Reuters that Tesla's move to Texas incorporation makes any legal challenge harder to predict: "The Texas thing is a wild card."
On Tesla's Q3 call on Wednesday, Musk said he had nothing to add beyond his comments on SpaceX's call a day earlier, CNBC reported. On that call he called a merger a "good idea," and responding to a question about it he said, "I feel like I'm tap dancing through a minefield." Background: special committees formed to study a merger.