SpaceX Soars as Tesla Faces Headwinds
Elon Musk’s SpaceX has surged to a $1.25 trillion (€1.06tn) valuation after merging with his artificial intelligence venture xAI, bringing it closer to Tesla’s market value and shifting the balance of his business empire. Tesla currently stands at approximately $1.58 trillion (€1.34tn), just 26% higher than the combined SpaceX-xAI. On paper, this means Musk now derives a larger share of his wealth from space and AI than from electric vehicles.
Tesla has struggled in early 2026, with shares down roughly 6% after reporting a 16% drop in vehicle deliveries in January and a 3% decline in 2025 revenue — its first annual loss on record. Rising competition in China and Europe, alongside the end of U.S. federal EV tax credits, has pressured the core business. Musk’s political affiliations have also affected the company’s public perception.
Tesla Shifts Focus to Robotics
With EV sales slowing, Musk is redirecting Tesla toward robotaxi services and Optimus humanoid robots, though both ventures are still in their infancy. Last week, he told analysts that production of the Model S and X — which together made up less than 3% of 2025 deliveries — would end, and those assembly lines would be repurposed for Optimus. The move signals Tesla’s pivot from traditional car manufacturing to technology-driven innovations.
SpaceX Dominance and Emerging Risks
By contrast, SpaceX continues to dominate orbital launch services, securing multi-billion-dollar contracts with NASA and the U.S. Department of Defense. Its Starlink satellite network now operates more than 9,000 satellites and serves roughly nine million customers. The merger assigns $1 trillion (€847bn) in value to SpaceX and $250 billion (€212bn) to xAI. Musk plans for the combined entity to explore space-based data centers, though technical, logistical, and financial hurdles make a full-scale rollout a long-term prospect.
However, the merger introduces new regulatory and political risks. xAI faces scrutiny 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 investigations. Legal experts caution that some of these risks could extend to SpaceX, particularly given Starlink’s international operations. While privately held SpaceX allows Musk more control, a future public listing could test investors’ appetite for a high valuation amid these growing regulatory challenges.
