Traders on Kalshi's prediction markets are pricing in a greater-than-even chance that Elon Musk merges Tesla and SpaceX by mid-2027, as Wall Street speculation about a potential combination of the two companies intensifies following a pair of Wall Street Journal reports published August 11, 2026.
The Tesla-SpaceX merger market currently prices a 60% chance of a deal before May 1, 2027, 51% before April 1, 2027, and 41% before March 1, 2027.
What’s the latest on a Tesla-SpaceX merger?
Speculation centers on a clause embedded in Musk's $1 trillion Tesla compensation package, one that could substantially accelerate his payout if Tesla is acquired or otherwise changes hands.
The Wall Street Journal's Theo Francis and Andrew Mollica reported on August 11, 2026 that the pay package approved by Tesla shareholders contains "an escape clause that could pay off for Elon Musk in several ways if he folds the automaker into his SpaceX empire."
Musk also has "considerable say over any offer SpaceX makes for Tesla, thanks to his sweeping control over the rocket company." Kalshi traders have taken note, with the probability of a deal climbing across all three deadline markets tracked on the platform.
Under a hypothetical $2 trillion all-equity transaction, roughly $506 per share, existing Tesla shareholders would retain majority ownership of the combined entity, while Musk would hold approximately 32% of the equity, primarily through his Class B shares.
A merger could also significantly increase Musk's voting control. The Class B shares would have “10 times the voting power of Class A shares,” meaning Musk would control around 73% of the new company.
"Musk would keep voting control over the combined company even at very high multiples," Francis and Mollica wrote.
Tesla China
In a separate report published the same day, Journal reporters Becky Peterson and Raffaele Huang wrote that some Tesla executives had been told to prepare for a separation of the company's China business, through a spinoff, sale, or closure, according to people familiar with the matter. Musk publicly denied the report.
Separating Tesla's China operations could remove a potential obstacle to a SpaceX combination because the rocket company is a major U.S. defense contractor subject to national-security requirements.
"Musk in recent years instructed Tesla executives to organize the company with a 'laser' between its US and China businesses, according to people familiar with the planning," Peterson and Huang reported. "He wanted to ensure that in the event of geopolitical strife between the two countries, at least the US half of Tesla would survive."
Neither company has publicly confirmed merger plans. The August 11, 2026 reports drove a measurable increase in Kalshi traders' probability estimates for a deal.
The takeaway:
Kalshi markets now predict:
Tesla-SpaceX merging by May 1, 2027: 60%
Tesla-SpaceX merging by April 1, 2027: 51%
Tesla-SpaceX merging by March 1, 2027: 41%
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