Elon Musk is exploring a massive merger between Tesla and SpaceX

Elon Musk, the head of Tesla and SpaceX, just dropped a massive surprise during back-to-back earnings calls that could shake up the electric vehicle maker forever. Tesla delivered 486,532 vehicles in the third quarter, dropping about 2 percent from a year earlier as car sales stalled.

Net income attributable to common shareholders tumbled about 43 percent to $787 million as money poured into robots and artificial intelligence projects. A day earlier, SpaceX reported a $4.4 billion profit and Musk hinted at combining his two giants. Executives at both companies noted that special committees have been formed to explore a potential merger, though no final agreement has been reached yet.

Sam Abuelsamid, the vice president of market research at Telemetry, tells Observer that the possible deal is really about consolidating control. Abuelsamid points out that Musk already controls SpaceX and a merger could give him an even tighter grip on Tesla. The talk follows a flashy Hollywood stunt in Texas where Tesla showed off a new SpaceX-powered Roadster that Musk claims can launch into the air.

That flying version is unlikely to ever reach production due to safety and practicality, leaving customers who put down $50,000 reservations back in 2017 still waiting. Meanwhile, Tesla lowered its capital-spending outlook for the year to more than $20 billion, down from a prior forecast of over $25 billion, while pushing ahead with bipedal robots and a joint chip-making venture called Terafab.

For anyone watching the stock or waiting on a vehicle, the next move belongs to the special committees.

Photo: Gage Skidmore, CC BY-SA 4.0, via Wikimedia Commons, AI-edited