Texas Attorney General-Elect Promises 'Tremendous Scrutiny' of Tesla–SpaceX Merger

Texas attorney general-elect Nathan Johnson said on November 12, 2026 that any merger of Tesla (NASDAQ:TSLA) and SpaceX (NASDAQ:SPCX) would receive "tremendous scrutiny" from his office. The interview, published November 13, came as reports indicate merger talks between the two Elon Musk companies are moving toward an announcement as soon as December.

Both companies are incorporated in Texas. Johnson does not take office until January 2027. He declined to discuss details of a potential combination and has announced no investigation.

The market registered little direct reaction. Tesla closed at $390.22 on November 13, down 1.82%. SpaceX closed at $139.11, down 0.59%. Other factors likely drove both moves — SpaceX launched a Starship test flight during the same session.

What did Johnson actually say?

Johnson is one of the Democrats who won statewide office on November 3, 2026. He succeeds Ken Paxton, who lost the U.S. Senate race to James Talarico. Governor-elect Gina Hinojosa and Talarico have also promised to check Musk's power.

Johnson said Musk has received respect because of his ties to the Republican Party, and that he has no hesitation about examining Musk's relationships with the state. He added that he does not want anyone to control government so much that they can use public power for private gain, and that he believes Musk's empire is at great risk of crossing that line.

The deal itself remains at an early stage. Special committees of independent directors are leading the talks, no terms are public, and neither company has filed anything. Tesla's third-quarter release mentioned only "Speculation around a potential Tesla-SpaceX merger." The warning, in short, arrived before any filing exists to scrutinize.

What tools does Texas law give the attorney general?

The Texas Free Enterprise and Antitrust Act of 1983 makes it illegal to buy another company's stock or assets when the effect may substantially decrease competition. Under the act, the attorney general can:

• Issue civil investigative demands — subpoena-like requests for documents and testimony
• Sue in state district court to block a deal temporarily or permanently
• Sue under federal antitrust law

Texas joined the multistate lawsuit to block T-Mobile (NASDAQ:TMUS) and Sprint in August 2019. Those two companies, however, competed directly with each other.

Tesla's overlap with SpaceX is thin by comparison. Tesla sells cars, robotaxi rides and batteries; SpaceX sells launches, Starlink internet and AI services. The existing ties between them — including Tesla's $2 billion investment in SpaceX equity and a jointly developed chip fab at Gigafactory Texas — raise governance questions more than competition questions.

Because of that, Texas would have a hard time winning in court. But document demands and a request for an injunction could delay a closing long before any judge rules on the merits.

Why does delay hurt Tesla more than SpaceX?

Tesla trades at more than 400 times earnings. Its third-quarter operating income fell 55.79% to $718 million as research spending rose.

Much of Tesla's valuation depends on what a combination might deliver. SpaceX, which reported third-quarter revenue of $14.60 billion and net income of $4.40 billion, is better positioned to absorb a wait.

Tesla rose 8.93% in the week ending November 13, a week that included reports the talks were advancing. The stock remains down 13.23% for the year, and the third-quarter results show a car business too small on its own to support the share price. A new state-level hurdle adds risk to the one outcome that could justify Tesla's valuation. SpaceX already reports Starlink and AI revenue directly, so its results depend less on a deal that may have to clear Texas.

What dates will decide the outcome?

Two dates matter: Tesla's annual meeting on December 3, 2026, and Johnson's swearing-in in January 2027. If a deal is announced and his office sends no civil investigative demands within his first 60 days, his warning will likely have had little practical effect on the deal.

Until then, the scrutiny is a statement of intent, not an enforcement action.