Tesla reported third-quarter revenue of $28.05bn and earnings per share of $0.48 on Wednesday, beating Wall Street projections of $27.9bn and $0.43 respectively, the Guardian reported on Wednesday. The figures came as chief executive Elon Musk confirmed that boards at both Tesla and SpaceX had formed special committees to explore a potential merger, though no agreement on terms had been reached.
Musk, who leads both companies, told investors on Wednesday that he had said everything that should be said on the matter and declined to take questions. On Tuesday he had told SpaceX investors that combining the two companies would be a good idea and that there was a lot of merit to it. Any merger would require approval from 50% of all Tesla shareholders, he said.
Tesla's third-quarter revenue was slightly below the previous quarter's $28.23bn, and automotive revenue fell 3% year on year. The company's share price has dropped more than 11% this year amid competition from cheaper Chinese automakers, though it has rebounded somewhat since news of the possible SpaceX merger emerged last week. Last week Musk unveiled the Roadster 2 electric sports car, priced upwards of $200,000, which uses SpaceX technology and demonstrated jet-like thrusters at a facility in Texas.
Tesla has shifted focus from vehicle sales towards robotics, autonomous driving and artificial intelligence. Its Optimus robot has faced production hurdles, and its Robotaxi driverless service has hit roadblocks in scaling and expanding to new cities. Musk has previously forecast that probably half the US population would use Robotaxi by the end of 2025 and that Tesla could manufacture as many as 1m Optimus robots annually, targets the company has not met. Paul Miller, a principal analyst at Forrester, said Tesla robotaxis are carrying passengers but not yet at anywhere near the levels the company promised.
Why it matters for wealth
A Tesla-SpaceX merger would be a major corporate restructuring with potential tax and valuation implications for shareholders holding either company. The requirement for 50% shareholder approval means institutional and individual investors will have direct influence over whether the combination proceeds. The structure and terms of any deal could affect the tax treatment of existing holdings.
No timeline for a shareholder vote or final merger terms has been announced.
Source: The Guardian
Photo: Jae Park / Pexels
