SpaceX Soars as Tesla Faces Challenges
Elon Musk’s SpaceX has reached a $1.25 trillion (€1.06tn) valuation after merging with his AI venture xAI, bringing it closer to Tesla, which currently sits at $1.58 trillion (€1.34tn). This means Musk now derives more of his personal wealth from the rocket company than from his electric car business. Tesla has faced a rough start to 2026, with shares down around 6% following a 16% drop in vehicle deliveries in January and a 3% decline in 2025 revenue — the company’s first annual decline on record. Competition in China and Europe, along with the end of U.S. federal EV tax credits, has added pressure, while Musk’s political ties have also impacted the brand.
Tesla Shifts Toward Robotics
With slowing EV sales, Musk is pivoting Tesla toward robotaxi services and its Optimus humanoid robots, both still in early development. Last week, he told analysts that production of the Model S and X — which accounted for less than 3% of deliveries in 2025 — will end, with those lines repurposed for Optimus. The move highlights Tesla’s effort to diversify beyond traditional car manufacturing into technology-driven ventures.
SpaceX Dominance Meets New Risks
SpaceX maintains a strong position in orbital launch services, securing multi-billion-dollar contracts with NASA and the U.S. Department of Defense. It also operates Starlink, with over 9,000 satellites and roughly nine million customers. The merger assigns $1 trillion (€847bn) to SpaceX and $250 billion (€212bn) to xAI, aiming to explore space-based data centers to bypass Earth’s energy constraints.
However, the merger introduces regulatory and political risks. xAI faces investigations in the U.S., Europe, India, and Malaysia over its Grok image generator, which produced explicit deepfake content, while French authorities recently raided X’s offices amid algorithmic abuse probes. Legal experts warn some risks could extend to SpaceX, particularly given Starlink’s global operations. While privately held SpaceX allows Musk more control, a public listing could test investor appetite for such high valuations amid growing scrutiny.
