SpaceX and Tesla merger: Could a $10,000 investment grow to $20,000 by 2030 or are investors paying too much?

Tesla and SpaceX have each formed a committee to study a possible merger. A formal proposal could follow soon. Elon Musk runs both companies. A combined company would bring electric vehicles, battery packs, rocket launches, satellite internet and artificial intelligence under one roof.

The merger math is complicated. Until terms are on the table, any figure for what $10,000 would be worth by 2030 is a guess. What can be checked today is how each business is doing and what investors are paying for it.

SpaceX is small in sales but priced like a giant

SpaceX went public earlier this year. Its market cap is now close to $1.9 trillion. Market cap is the total value of all a company’s shares, and on that measure SpaceX is already bigger than Tesla.


Its business is much smaller than that figure suggests. Revenue last quarter was $14.6 billion, up 161% from a year earlier. Most of the jump came from Starlink, the satellite internet service, and from the company’s spending on AI infrastructure.

Connectivity revenue, which is mostly Starlink, rose 69% to $5.25 billion. AI revenue was $7.56 billion, more than ten times what it was in the same quarter last year. Together, the two come to about $12.8 billion. The remaining $1.8 billion or so comes from the rest of the business.

The growth is real, but the price is steep. SpaceX trades at a price-to-sales ratio of 56. That means investors are paying $56 for every $1 of the company’s annual sales. It is one of the highest ratios in the market. By a rough check, a ratio of 56 against a $1.9 trillion market cap implies trailing yearly sales of around $34 billion. That is a good deal less than the $14.6 billion quarter, annualised, would suggest if growth keeps going. Buyers at this price are betting that it will.

Tesla is the bigger business, but its sales have stopped growing

Tesla’s revenue has been above $100 billion over the past 12 months, several times SpaceX’s. But last quarter its revenue didn’t grow. Third-quarter sales were little changed from a year earlier.

Electric vehicles still make up most of Tesla’s business, and the company is finding it hard to keep scaling them. It is spending heavily on self-driving cars and humanoid robots. Neither brings in meaningful money yet.

Tesla’s price-to-sales ratio is 13, far lower than SpaceX’s. That doesn’t make the stock cheap. Its price-to-earnings ratio is 417, meaning investors pay $417 for each $1 of yearly profit. A ratio that high usually goes with a company whose profits are expected to rise sharply.

Tesla’s profits have been moving the other way. Its EBIT, which is earnings before interest and taxes, peaked at nearly $15 billion in late 2022. It has since fallen to $3.63 billion. That is a drop of roughly three-quarters.

The trend raises an obvious question. If revenue isn’t growing, what would turn earnings around?

What the two sets of numbers mean for a combined company

Put side by side, the two companies are opposites. SpaceX has fast-growing sales and a very high valuation relative to them. Tesla has large sales that have stopped growing, falling earnings and a high valuation relative to those earnings.

A merger would join both problems in one share price. Whoever holds the combined stock in 2030 would be relying on two things at once. One is that SpaceX’s connectivity and AI growth continues for years. The other is that Tesla’s newer bets, self-driving and robots, start producing real money before its car business weakens further.

The merger wouldn’t change either company’s underlying numbers. It would pool them. A strong SpaceX could lift the combined company, but it would also have to carry a Tesla whose earnings are shrinking. Whether $10,000 grows or shrinks by 2030 will depend on how that balance plays out and on what terms any deal sets, which nobody knows yet.