SpaceX Merger Rumors and FSD's European Expansion

May 31, 2026

✨ By Aimee Joiner, AI-assisted writer at TSLAblog.com

TL;DR

SpaceX and Tesla are reportedly weighing a merger that would create a $3.4 trillion entity with zero initial profits
Estonia has officially approved Tesla's Full Self-Driving system, making it the third European nation to do so
The SpaceX-themed 'NASA' ETF has surged to $2.6 billion in assets as retail demand for Elon Musk's rocket company peaks
Rivian's R2 Performance has matched the Tesla Model Y Performance in energy efficiency at 105 MPGe
Tesla closed Friday at $435.79, down 1.43% as analysts debate the impact of a potential SpaceX tie-up

The $3.4 Trillion Question: A SpaceX-Tesla Merger?

Speculation is reaching a fever pitch regarding a potential merger between Tesla and SpaceX, a move that would consolidate Elon Musk’s two most valuable holdings into a single $3.4 trillion behemoth Fortune. Wedbush Securities analyst Dan Ives has placed the probability of a combination at 80%, suggesting a game plan is already in place to fuse the EV maker with Musk’s rocket and AI operations Fortune. Betting site Kalshi currently shows 52% odds that a deal will be finalized by May of next year Fortune.

While the buzz is undeniable, the financial reality is stark: a merged entity would likely be unprofitable from day one Fortune. Analysts point out that SpaceX’s anticipated $1.75 trillion market cap appears overpriced based on conventional metrics, yet Musk may use these inflated shares as currency to rescue Tesla shareholders as the automaker’s profits dwindle Fortune. David Trainer, CEO of New Constructs, views the potential merger as the only way to "bail out" Tesla investors who have maintained the company's massive valuation despite shrinking margins Fortune.

FSD Gains Ground in Europe Amid Internal Safety Dissent

Tesla’s Full Self-Driving (FSD) technology has secured a significant regulatory win in Estonia, which now recognizes the type approval issued by the Dutch vehicle authority RDW Estonian World. Estonia joins the Netherlands and Lithuania as the only European nations to allow FSD-equipped vehicles on their roads Estonian World. The system remains classified as SAE Level 2, meaning the driver stays legally responsible and must be ready to take control at any moment Estonian World.

However, the expansion comes as former Tesla AI trainers raise alarms regarding the system's reliability. A new report indicates that former trainers do not trust the self-driving tech or the safety data being promoted by the company Benzinga. This internal skepticism contrasts sharply with Tesla’s public narrative of rapid improvement, highlighting a growing rift between engineering reality and corporate safety claims.

The SpaceX IPO Fever and the 'NASA' ETF Surge

Retail investors are finding creative ways to gain SpaceX exposure ahead of its historic IPO. The Tema Space Innovators ETF, trading under the ticker NASA, has seen its assets under management explode to $2.6 billion after ending the last trading week with significant inflows Qoo Media. SpaceX currently comprises 7.5% of the NASA ETF, which provides a rare vehicle for everyday investors to own a piece of the private company Qoo Media.

Other funds are also benefiting from the hype. The ERShares Private-Public Crossover ETF (XOVR) holds SpaceX shares it values at nearly $300 million based on an expected $1.5 trillion IPO valuation Qoo Media. Despite the excitement, some retail traders are expressing caution regarding the rumored $2 trillion price tag, fearing that the stock could plummet once early insiders begin to cash out Business Insider.

Market Watch

Tesla (TSLA) closed Friday, May 29, 2026, at $435.79 per share, marking a 1.43% decline for the session. Markets are currently closed for the weekend. The stock remains under pressure as investors weigh the potential dilution of a SpaceX merger against the growth prospects of Tesla's AI and robotics divisions. Analysts are specifically watching for further details on the SpaceX IPO, which is expected to raise $75 billion Business Insider. Meanwhile, SpaceX recently bolstered its balance sheet by landing a $4 billion deal just weeks before its anticipated market debut TheStreet.

Quick Hits

Rivian’s R2 Performance matched the Tesla Model Y Performance with a 105 MPGe efficiency rating, though it offers a higher 330-mile range ArenaEV.
BYD has announced it will take full financial responsibility for crashes occurring while its cars drive autonomously, a first for the industry Autoevolution.
Grab and WeRide have launched a free self-driving shuttle service in Singapore, completing over 4,000 autonomous rides to date Alvinology.
FAA documents revealed SpaceX's "Starfall" project, which uses uncrewed reentry vehicles to support in-space manufacturing SpaceNews.
Elon Musk’s xAI is facing a lawsuit from Tennessee teens over allegations of AI-generated child sexual abuse material NPR.
The White House is proposing a hike in North American auto content rules to 82%, with half required to come from the U.S. Automotive News.
Anker’s Solix E10 home battery system is emerging as a more modular and affordable competitor to Tesla’s Powerwall 3 Gizmodo.
Joby Aviation demonstrated its electric air taxi in Manhattan, flying from JFK to a downtown heliport in April NY Times.
Microcap company Elektros received a response from Volkswagen regarding its patented multi-port EV charging technology Eagle-Tribune.
Peugeot is seeing a revival in demand for its EVs in France and Germany, signaling toughening competition for Tesla in Europe Automotive News.
Experts warn that open-weight AI models, including those from xAI, are increasingly susceptible to having their safety guardrails stripped away NPR.