Tesla (TSLA) investors are about to face a moment that could reshape how the market thinks about Elon Musk’s business empire. For years, Tesla has been the primary public-market vehicle for investors who wanted exposure not just to electric vehicles, but to Musk’s broader vision spanning AI, autonomy, robotics, and even space. That dynamic may begin to shift as SpaceX nears what could become the largest initial public offering in history.
The recently disclosed S-1 filing revealed something that many suspected but few had quantified: The financial ties between Tesla and SpaceX are deeper than previously understood. Since 2023, Tesla has booked roughly $890 million in revenue from SpaceX and xAI through Megapack energy-storage sales, procurement services, and other related transactions. In addition, Tesla holds a stake in SpaceX, meaning the relationship is not only operational but also financial.
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So what does the SpaceX IPO really mean for Tesla stock? Will it ultimately unlock value for TSLA shareholders or create short-term volatility as investor attention and capital rotate toward SpaceX? And most importantly, how should TSLA investors position themselves ahead of the offering? Let’s take a closer look.
About Tesla Stock
Tesla is a prominent innovator dedicated to accelerating the global transition to sustainable energy. The Elon Musk-led powerhouse designs, develops, manufactures, leases, and sells high-performance fully electric vehicles, solar energy generation systems, and energy storage products. It also offers maintenance, installation, operation, charging, insurance, financial, and various other services related to its products. In addition, the company is increasingly focusing on products and services around AI, robotics, and automation. TSLA’s market cap currently stands at $1.6 trillion.
Shares of the EV maker have fallen 4% on a year-to-date (YTD) basis. TSLA stock was trending higher in early May amid hopes that Tesla’s Full Self-Driving system would gain approval for sale in China. However, the stock has been listless recently as investors shifted their focus to SpaceX.
www.barchart.com SpaceX IPO Filing Reveals Deepening Tesla Connections
Last week, SpaceX finally released its S-1 IPO registration statement, with investors scrutinizing the details ahead of what could be the largest IPO ever. And one detail that drew particular attention was the increasingly close ties and growing overlap between Elon Musk’s rocket company and his EV maker, Tesla, which even fueled speculation about a potential megamerger between the two companies. It’s also worth noting that the word “Tesla” appeared 87 times in the S-1, which is a lot considering that “Musk” was mentioned 174 times.
The first key point to highlight is that Tesla holds a stake in SpaceX. The EV maker invested roughly $2 billion in xAI, which merged with SpaceX in February. As a result of the merger, Tesla’s right to buy shares of xAI’s Series E Preferred Stock was converted into the right to acquire SpaceX Class A common stock. With that, Tesla holds about 19 million shares of SpaceX.
Moving on, Tesla and SpaceX are doubling down on AI. As AI applications require tons of advanced chips, the companies are building a “Terafab” semiconductor manufacturing facility. SpaceX’s prospectus noted that chip production remains one of the primary bottlenecks to AI’s continued growth, adding that the company has greater control over the full physical AI stack than any other AI player, with the Terafab initiative designed to extend that control down to the foundational processor layer. The prospectus also stated that the pair is developing a digital AI assistant, Macrohard. Macrohard is an agentic AI platform designed to fully replicate digital workflows and enhance how humans operate computers — from coding and product development to management and end-to-end business processes — using advanced autonomous agents.
SpaceX has also purchased energy storage systems from Tesla. This is arguably one of the most interesting points, as it has very positive long-term implications for Tesla. I will return to it shortly.
In addition, SpaceX has paid Tesla for services, including purchasing. xAI also previously purchased services from Tesla. Tesla has also advertised on X, which later merged with xAI.
Finally, Tesla and SpaceX share a director. SpaceX disclosed in the filing that it will appoint Tesla director Ira Ehrenpreis to its board. Notably, other SpaceX board members, Antonio Gracias and Steve Jurvetson, previously served as directors at Tesla.
Meanwhile, the SpaceX prospectus said, “We plan to explore other areas of strategic collaboration with Tesla in the future.” That, combined with the increasingly converging paths of the two companies, will likely continue to fuel speculation that Tesla and SpaceX could one day merge into the flagship of Musk’s business empire. “We continue to believe that SpaceX and Tesla will eventually merge into one company in 2027, with the groundwork already in place for both operations to become one organization,” according to Wedbush analyst Dan Ives.
Tesla Energy Could Be the Biggest Winner From SpaceX’s Scale
At this point, let’s take a look at the financial side of the deepening business ties between Tesla and SpaceX. In its S-1 filing, SpaceX detailed all of its related-party transactions with Tesla, allowing us to evaluate the extent of overlap across Musk’s companies. That said, Tesla has generated roughly $890 million in revenue from SpaceX and xAI since 2023, which is actually a substantial figure.
SpaceX disclosed that it purchased about $131 million worth of Tesla Cybertrucks in 2025 at the “manufacturer’s suggested retail price.” Still, this is not a positive development for the EV maker, as it implies that Cybertruck sales have been artificially boosted in recent months, suggesting the pickup has struggled to gain traction with everyday consumers.
At the same time, the filing also revealed a major positive for Tesla, particularly for its energy business, which I have been bullish on for a while. The bulk of the transactions — $506 million in 2025 and $191 million the year before — stemmed from Tesla’s sales of Megapack energy-storage systems to xAI, which SpaceX acquired earlier this year. Moreover, SpaceX bought $34 million worth of Megapack products from Tesla in the quarter ended March 31, 2026. The filing said payments were made on terms comparable to those offered by third parties.
The key point here is that Tesla’s energy business could become one of the largest beneficiaries of SpaceX’s scale. The primary driver of Megapack demand from SpaceX is xAI, which SpaceX acquired earlier this year. xAI relies on Megapacks to provide energy smoothing, backup power, and load management for its massive data centers. Outside of AI, SpaceX’s core rocket and manufacturing operations are highly resource-intensive, requiring significant localized power backup and peak-demand shaving. In addition, SpaceX and Tesla are building Terafab, which will require heavy grid and energy management hardware from Tesla. Finally, Tesla is building a massive solar panel factory that Musk has said aims to produce roughly 100 gigawatts of solar modules annually. And SpaceX will likely be a major customer for these solar modules, as it needs plenty of them for its space-based AI data centers.
What Could SpaceX IPO Mean for TSLA Stock and How Should Investors Play It?
While I view SpaceX’s IPO as a positive for Tesla’s long-term growth prospects, I also acknowledge that it could bring some short-term volatility to Tesla’s stock. Let me explain.
For years, investors could gain exposure to Musk’s vision only through Tesla shares, but that is set to change once SpaceX goes public. And it’s no secret that Musk has legions of retail fans. BNP Paribas analyst James Picariello estimates that retail investors hold roughly 40% of Tesla’s shares. The analyst said the SpaceX IPO will pressure TSLA stock by effectively “splitting” the pro-Musk retail shareholder base. And I completely agree with that view. Given the nature of retail investors, I expect some capital to rotate from Tesla into SpaceX to capitalize on the current excitement.
And now the key question is how to approach the SpaceX IPO in the right way. If you’re a TSLA shareholder, you essentially have two options. First, you could simply sell the stock and look to scoop it up at a lower price later, or if you have a good cost basis, consider hedging with options starting about two weeks ahead of the IPO.
And for those looking to play the IPO itself, there are also two options. Personally, I plan to allocate a small portion of capital to try to capture a first-day rally in SpaceX shares (I think there’s a high probability this plays out given the current buzz, but it’s important to note that this is a high-risk move), then wait a few days/weeks for key levels to form on lower time frames and begin building a position on a pullback to one of those levels.
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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