Market odds point to a SpaceX, Tesla merger but not in 2026

A merger between SpaceX and Tesla is increasingly looking inevitable according to prediction market odds. However, it might take longer than some traders expect, with an official announcement unlikely this year.

On Tuesday, during SpaceX’s first quarterly earnings results as a publicly traded company, Musk confirmed he is considering merging Tesla with SpaceX, which, based on the current market capitalizations of both companies, would create a $3.7 trillion conglomerate. It would create the biggest merger in history for publicly traded companies.

"I think it would be a good ​idea, but it's really up to the special committees of both companies," Musk said in the SpaceX earnings call, adding that because of conflict of interest, he cannot be part of the committees, which comprise independent directors.

The committees were formed at the request of shareholders, who would also have to approve any merger proposals, Reuters reported.

Musk expressed how delicate the process of trying to merge the two companies is by comparing it to “tap dancing on a minefield”.

A day later, in the earnings conference call for Tesla’s Q3 earnings, Musk refused to talk much on the subject, stating that he had already said everything he needed to about the matter the previous day.

However, traders remain relatively optimistic that a merger will happen at some point, with Polymarket odds standing at 56% for an official announcement by June 30, 2027, and 67% by the end of 2027. Traders can buy the June 30, 2027 shares at $0.57 per share, while those for December 31, 2027, are going for $0.68 per share.

Traders have put over $70k on the June 30 contract, while the December 31 contract has just under $65k in cumulative volume. Overall, the Tesla and SpaceX merger market has seen over $1.56 million in volume.

What obstacles could delay a SpaceX and Tesla merger?

A merger between two of the world’s biggest companies was always going to face administrative, antitrust, and legal challenges, as witnessed in the case of Paramount’s acquisition of Warner Bros. Such deals can take several months before completion.

However, the contract on Polymarket is focused on the official announcement of a merger. Which means it is a matter of the two committees submitting their resolutions to determine whether an announcement is made.

The biggest challenge, though, comes from the potential investigation into Musk’s companies if Democrats win both Houses in the US mid-term elections. Odds on Polymarket are already in favor of a Democrat sweep, with Congress at over 90% and the Senate at around 65%. 

According to Politico, Congressional Democrats are preparing to launch an investigation into Musk and his companies, including SpaceX, Tesla, and Starlink.

This could delay the official announcement of the merger depending on how investigations develop and how soon they start after the midterms.