- A Tesla-SpaceX merger has been discussed on Wall Street.
- There are plenty of arguments in favour of a deal.
- But with the Falcon Heavy launch and the Tesla Roadster’s journey to space, the two companies are effectively already conjoined.
Tesla – I mean SpaceX – made spectacular news and restarted a space race out of “The Right Stuff” last week with the successful test flight of the Falcon Heavy rocket.
Of course, Tesla was also in the picture. Literally, as atop the big candle was Elon Musk’s personal cherry-red Tesla Roadster, with a SpaceX-suited dummy named “Starman” behind the wheel. David Bowie’s “Life on Mars” was on the stereo and “Don’t Panic” – a reference to Musk’s beloved “Hitchhiker’s Guide to the Galaxy” – was on the dashboard screen.
Starman and the Roadster are on their way to the asteroid belt and could meander through deep space for billions of years. Someplace out past Pluto, the Voyager I (launched in 1977) is carrying a golden LP with, among other artists, the music of Chuck Berry.
You can only imagine what the aliens will think when they figure out how to listen to that, then a bit later find Starman and Musk’s car. Don’t panic, indeed. With any luck, they will be so charmed they won’t destroy humanity to build an intergalactic freeway bypass.
Let’s get serious
Jokes aside, the Falcon Heavy launch with the Roadster payload has been called the most stunning PR stunt in human history, and while it certainly might be, it also shows that Tesla and SpaceX aren’t such separate entities anymore. Musk is CEO of both, and one day after the triumphant liftoff at the Kennedy Space Center’s old Apollo pad, he was on a conference call with Wall Street analysts to explain how Tesla managed to lose the most money in its history in 2017.
There’s been some talk that rather than have Musk pretending to run the two companies on separate tracks, with the key difference being that Tesla is public while SpaceX is private, Tesla and SpaceX should merge. I already think that would be the deal of the century, if it happens, for numerous reasons. I also thought that the deal wouldn’t yield much in the way of synergies. But then SpaceX sent Musk’s car to Mars. Boom! Synergies galore.
The upshot is that there’s something phony about talk of a Tesla-SpaceX merger – because it’s really already happened, optically. Sure, the balance sheets aren’t combined. But Tesla’s Design Studio is at SpaceX headquarters in Los Angeles, and Tesla routinely stages events there. Musk splits his time between SpaceX and Tesla, with his official home in LA. Tesla and SpaceX also cross-pollinate on ideas and technologies.
A merger in all but name
So while Musk’s Roadster orbiting Earth initially sounded like something frivolous, when we actually got to see it, you know… orbiting Earth, like something out of the “Radar Rider” opening sequence from the 1981 grownup animated movie “Heavy Metal,” it was quite mesmerising. A lot of observers might have forgotten about the company that actually launched the rocket and moved on to thinking about the company whose badge was on the hood of the car.
Tesla absorbed SolarCity in 2016, so it’s unlikely that an official tie-up with SpaceX would happen in 2018. Tesla also has a bunch of problems to sort out between now and the middle of the year. The production ramp on the Model 3 mass-market car isn’t going according to plan (But don’t panic, Tesla says!), and Musk & Co. have painted themselves into a bit of a corner by revealing the Tesla Semi big rig and a next-generation Roadster, then taking deposits for the vehicles without really having the capacity to build either.
And after the company reported fourth-quarter earnings last week, Musk pledged to unveil the Model Y compact SUV before the end of the year. And complete a delayed coast-to-coast trip using the carmaker’s Autopilot self-driving technology.
Not much room in there for a merger. So the “soft” tie-up of SpaceX and Tesla appears to be the way to go. The truth is, it’s going phenomenally well. The markets and accountants might not know that the two companies are one. But the citizens of Earth do. And who knows what those watchers that are out there, beyond the rings of Saturn and keeping an eye on us, are thinking.
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