On July 2, 2026, a Tesla store in Alhambra, California, displayed the company's branding. Despite delivering impressive quarterly delivery figures, the electric vehicle maker's shares closed down 7.5% on the day.

Analysts at Royal Bank of Canada Capital Markets indicated that the Terafab chip collaboration project, involving Tesla and SpaceX, represents the most concrete near-term synergy channel between the two companies. By 2050, they estimate the partnership could save over $1 trillion in chip-related costs.

Royal Bank of Canada analyst Tom Narayan wrote in a research note: "If Tesla and SpaceX were to merge, it would create a highly competitive vertical integration ecosystem spanning from space orbit to the ground, covering satellite communications, autonomous vehicles, and humanoid robots. This ecosystem would be difficult for competitors to replicate."

Terafab is a large-scale vertical integration semiconductor joint venture factory led by Tesla, SpaceX, and xAI, with plans to mass-produce over one terawatt of total computing power in custom artificial intelligence chips annually.

The analyst maintained an "Outperform" rating on Tesla, setting a price target of $480—representing a potential upside of 55% from Monday's closing price.

The analyst added: "We believe the $480 price target could allow Tesla shareholders to accept a merger between the two companies. While SpaceX's stock has fallen 44% from its highs and the timing of any merger remains uncertain, the long-term growth potential and synergistic value of combining the two businesses remain highly attractive."