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Tesla Inc. (NASDAQ:TSLA) could be worth more than $500 a share in a potential merger with Space Exploration Technologies Corp. (NASDAQ:SPCX), according to Dan Ives of Yorkville Ives & Co. Ives puts the odds of a deal by the end of 2027 at 80% to 90%.

His thesis hinges on a central question: How much should Tesla shareholders receive for the company’s ambitions in artificial intelligence, autonomous driving and robotics?

Why Ives Sees a $500 Deal

In an Oct. 26 research note, Ives argued that a combination would bring Tesla’s autonomy and Optimus robotics businesses together with SpaceX’s computing infrastructure, chip-design capabilities and capital.

His $500-per-share valuation assigns roughly $165 to Tesla’s vehicle business and $335 to autonomy and Optimus. To Ives, these reflect the potential value of businesses that have yet to reach their full commercial scale.

The distinction matters because Ives believes Tesla shareholders would resist a transaction that values those future opportunities too cheaply. In his view, a deal below $500 a share would effectively transfer some of Tesla’s potential upside to SpaceX at a discount.

Tesla already holds a $2 billion stake in SpaceX, according to Ives’ note. He also sees opportunities for the companies to collaborate on software, chip design, robotics, connectivity and Terafab, the planned AI-chip manufacturing project.

The Merger Isn’t a Done Deal

Elon Musk confirmed during the companies’ third-quarter earnings call that Tesla and SpaceX had formed special committees of independent directors to consider a potential combination. Musk recused himself from the discussions because of his role at both companies.

However, Musk cautioned against treating a merger as inevitable. No terms had been agreed upon, and he said Tesla would need approval from holders of 50% of all outstanding shares—not merely a majority of votes cast.

That requirement creates a significant hurdle. Even if the boards see strategic benefits, Tesla shareholders must decide whether the proposed terms adequately reflect the value of the electric vehicle business and its longer-term AI ambitions. Tesla’s latest SEC filing also states that there is no assurance a transaction will be completed.

What Tesla Investors Should Watch

Ives’ 80%-90% probability is his forecast, not a company commitment. The next key developments are whether the independent committees agree on terms, how the companies value Tesla’s autonomy and robotics businesses, and whether a proposed exchange ratio can win shareholder approval.

For investors, the $500 figure is less a guaranteed destination than a measure of the premium Ives believes Tesla shareholders would require. Until a deal takes shape, the central question remains whether the strategic benefits of combining the companies can translate into terms both sides—and Tesla shareholders—will accept.

TSLA Price Action: Tesla shares were up 6.08% at $394.86 at the time of publication on Monday, according to Benzinga Pro data.

Photo: Paulm1993 / Shutterstock – ek