Wall Street analyst Dan Ives maintains his prediction that Tesla and SpaceX will merge in 2027, pointing to deepening operational ties through the joint TERAFAB semiconductor facility in Austin. Tesla invested $2 billion in SpaceX in Q1, while SpaceX is reportedly slated to go public as early as mid-2026.

Combined, Tesla and SpaceX have nearly $40 billion in business entanglements with the U.S. government, creating inevitable regulatory hurdles. The complexity stems from Musk owning significantly higher percentages of SpaceX and xAI than Tesla, creating conflicts when he negotiates merger terms with himself. The 50-cent drop to 10¢ for a September 2026 timeline reflects traders pricing in the massive regulatory and valuation challenges of combining trillion-dollar entities.