SpaceX Surges Amid Tesla Slowdown
Elon Musk’s SpaceX has reached a $1.25 trillion (€1.06tn) valuation following its merger with AI company xAI, narrowing the gap with Tesla, which is valued at roughly $1.58 trillion (€1.34tn). On paper, Musk now derives more of his wealth from SpaceX than from his electric car company. Tesla’s stock has fallen about 6% in 2026 after reporting a 16% drop in vehicle deliveries in January and a 3% decline in total revenue for 2025, marking its first annual revenue decline. Increasing competition in Europe and China, along with the end of U.S. EV tax incentives, has put additional pressure on Tesla. Musk’s political activities have also affected the brand’s perception globally.
Pivoting Tesla Toward Robotics
With electric vehicle sales softening, Musk is shifting Tesla’s focus toward robotaxi services and the Optimus humanoid robot project, areas still in early development. He recently announced plans to end production of the Model S and X vehicles — which represented less than 3% of 2025 deliveries — and repurpose those lines for Optimus production. The move signals Tesla’s effort to diversify its revenue streams as its traditional car business faces stagnation.
SpaceX-xAI: Ambitious Plans and Emerging Risks
SpaceX dominates orbital launch services, with lucrative contracts from NASA and the U.S. Department of Defense, while its Starlink satellite network operates over 9,000 satellites and serves roughly nine million customers. The new merger values SpaceX at $1 trillion (€847bn) and xAI at $250 billion (€212bn). Musk envisions using the combined company to develop data centers in space, aiming to bypass Earth’s energy constraints, though full-scale implementation faces major technical, financial, and logistical challenges.
The merger also introduces potential regulatory and political risks. xAI is under investigation in the U.S., Europe, India, and Malaysia following the use of its Grok image generator for explicit deepfake content. French authorities recently raided X’s offices in connection with algorithmic abuse probes. Legal analysts warn that these risks could spill over to SpaceX, particularly because Starlink operates internationally. For now, these issues are easier to manage with SpaceX privately held, but a public listing could test investor confidence in the company’s high valuation amid mounting regulatory scrutiny.
