Tesla (TSLA) shares advanced 2.38% to $427.79 in midday trading on Friday, as investors weighed new disclosures from SpaceX's IPO filing, a broader market rally, and a safety recall affecting nearly 14,600 Model Y SUVs. The stock remains below its 52-week high of $498.83.
The primary catalyst was the SpaceX IPO filing, which revealed approximately $650 million in transactions among Elon Musk's companies last year, including SpaceX, xAI, and Tesla. SpaceX and xAI purchased goods and services from Tesla, such as Megapack battery systems and Cybertrucks. Tesla also holds nearly 19 million SpaceX Class A shares, representing less than 1% ownership post-offering.
These intercompany dealings have fueled speculation on Wall Street. Wedbush Securities analyst Dan Ives suggested that SpaceX and Tesla could eventually merge into one company by 2027, according to Business Insider, though no such merger has been announced. Ives noted Musk's desire to "own and control more of the AI ecosystem."
However, the disclosures also raise governance concerns. Related-party transactions can be strategically beneficial but may also prompt questions about capital allocation and oversight. For Tesla investors, the key issue is whether SpaceX enhances Tesla's valuation or competes for attention and resources.
On the automotive front, Tesla recalled 14,575 Model Y SUVs in the U.S. due to missing certification labels with weight specifications, the National Highway Traffic Safety Administration reported. The missing labels could lead to overloading and increased crash risk, though no accidents or injuries have been linked to the issue.
The broader market provided a tailwind, with the Dow Jones Industrial Average hitting an intraday record and the S&P 500 index on track for its eighth consecutive weekly gain. Trading occurred ahead of the Memorial Day holiday weekend, with markets closed on Monday.
In China, Tesla launched its Full Self-Driving (FSD) software, as reported by The Wall Street Journal. Meanwhile, Mercedes-Benz announced plans to roll out urban assisted driving in select German cities by year-end, intensifying the competition in autonomous driving technology.
Elon Musk reiterated his expectation that self-driving cars without human safety monitors will spread across the U.S. later this year, following initial deployment in Texas. However, Reuters reported that Tesla's robotaxi service still faces long wait times and uneven availability, while Alphabet's Waymo recently recalled about 3,800 robotaxis amid safety scrutiny.
Analysts remain cautious about the gap between ambition and execution. Morningstar's Seth Goldstein noted that Tesla is likely cautious because "the stakes are very high," while CFRA's Garrett Nelson observed that investors know "things happen on Elon time."
Looking ahead, Tesla shareholders will monitor fresh SpaceX filing details, evidence of FSD traction in China, and whether Friday's bounce holds after the holiday break. The core automotive business remains important, but for now, the market is pricing Tesla as a broader, more complex story.
