Elon Musk keeps Tesla-SpaceX merger speculation alive, touts 'overlap' on many fronts

Elon Musk kept alive speculation about a potential merger of Tesla and SpaceX on Wednesday, saying the companies were working more closely together and that any discussion about combining them would have to follow the appropriate process.

Asked on Tesla's second-quarter earnings call whether increasing overlap between the companies could eventually lead to a merger, Musk said there’s “more and more overlap” on many fronts.

"Obviously, we can't talk about combining companies and that kind of thing on an earnings call. It's got to be done with the appropriate process," Musk said.

Tesla General Counsel Brandon Ehrhart said the electric-vehicle maker had strengthened its ties with SpaceX through an investment and a framework agreement signed earlier this year.

"We continue to benefit from our relationship with SpaceX. They've been a great partner. We have numerous beneficial transactions with them," he said.

Musk said SpaceX's Starlink satellite internet service would be integrated into Tesla's Cybercab robotaxi and eventually all Tesla vehicles in markets where Starlink is available.

"For a Robotaxi situation, you need to have coverage everywhere," Musk said, explaining that satellite connectivity would prevent autonomous vehicles from losing connectivity in areas with poor cellular coverage.

He added that Starlink would also improve in-car entertainment by allowing passengers to stream high-bandwidth content such as live 4K sports.

The remarks are likely to fuel investor speculation about potential merger between Musk's companies, which already collaborate on manufacturing, artificial intelligence, robotics and communications technologies.

Tesla reported mixed second-quarter results, with revenue of $28.24 billion beating Wall Street estimates of $25.55 billion on record vehicle deliveries and strong energy-storage deployments.

Adjusted earnings of 33 cents per share, however, missed analysts' expectations of 49 cents as higher costs and heavy investment weighed on profitability.

The company said capital expenditure would exceed $25 billion in 2026 as it ramps up spending on artificial intelligence, manufacturing capacity, robotics and autonomous driving.

Tesla shares fell 1.3% in regular trading before the results and dropped a further 3.9% after hours.