During SpaceX's earnings call, CEO Elon Musk proposed that merging SpaceX and Tesla could be beneficial, indicating that both companies' boards are considering this possibility. This announcement comes just before Tesla's earnings report, where analysts expect earnings per share of 43 cents and revenue of $27.9 billion.
If Tesla fails to meet these expectations, it could see a slight revenue decline from $28.1 billion a year earlier. Tesla's recent vehicle deliveries for the third quarter were 486,532, about 2% lower than the previous year, reflecting increased competition from Chinese EV manufacturers like BYD and Xiaomi.
Musk emphasized the importance of capital expenditures, which are projected to exceed $25 billion this year, significantly up from $8.5 billion in 2025, as Tesla invests in future technologies such as robotaxis and humanoid robots. The potential merger is fueled by collaborations in AI and chip design, with Tesla already utilizing SpaceX's Grok AI technology.
However, Musk acknowledged that shareholder approval would be necessary for any merger, requiring a 50% vote of all shares. Tesla's stock has declined 14% this year, underperforming compared to other major tech companies, while SpaceX's stock has risen since its IPO.
Investors are particularly interested in updates regarding Tesla's Full Self-Driving system and the Cybercab robotaxi, as the company aims to catch up with competitors like Waymo and Baidu in the autonomous vehicle space