Why a Merger With Tesla Could Be a Disaster for SpaceX
2026-10-23 01:00
•Jeremy Bowman •The Motley Fool
•••••••• •••••• Axe Cap view
SpaceX-Tesla Merger: A Risky Gamble for SpaceX Investors
SpaceX’s growth contrasts sharply with Tesla's stretched valuation and faltering core business.
Tesla's market value is blisteringly high—around $1.53 trillion with a price-to-earnings ratio near 200—hinging largely on future bets like full self-driving and Optimus robots that haven’t materialised. Meanwhile, Tesla's underlying automotive business shows weak revenue growth and declining deliveries, which should raise eyebrows. SpaceX, on the other hand, is firing on all cylinders: doubling revenue, expanding its AI infrastructure rapidly, and running a profitable Starlink satellite internet service. Merging with Tesla means SpaceX players would shoulder Tesla’s inflated valuation and risk, diluting the growth story. For South African investors, this signals caution against tying into overhyped tech narratives that often drive USD/ZAR volatility but don’t yield stable returns here. If Tesla’s valuation drops significantly or they start delivering on autonomy, the picture might change. Until then, steer clear of any combined vehicle that means overpaying for promises instead of profits. this is just our opinion and not financial advice
Avoid any exposure to a potential SpaceX-Tesla merger scenario. Instead, watch the USD/ZAR closely for Tesla-driven volatility and focus on solid JSE banks like Standard Bank or FirstRand offering more reliable earnings growth.
- TSLA
- SPCX
- USD/ZAR
- Standard Bank
- Tesla delivers on full self-driving or Optimus, triggering a valuation rerating
- SpaceX growth stalls or faces regulatory hurdles
6/10
The article argues that a potential merger between SpaceX and Tesla would be detrimental to SpaceX investors. Tesla's valuation appears inflated at $1.53 trillion with a P/E ratio of 200, driven almost entirely by unproven future products like Optimus robots and full self-driving capabilities. Meanwhile, Tesla's core automotive business shows flat revenue growth and declining deliveries. SpaceX, which is experiencing rapid growth from its AI infrastructure business and profitable Starlink division, would overpay for Tesla's bloated valuation. The author recommends SpaceX investors reject the merger unless Tesla's price decreases or it demonstrates financial success with its autonomy products.
Our take is based on reporting first published by The Motley Fool.