SpaceX Surges as Tesla Faces Challenges
Elon Musk’s SpaceX has reached a $1.25 trillion (€1.06tn) valuation after merging with his AI venture, xAI, narrowing the gap with Tesla and shifting the balance of his business portfolio. Tesla’s market value now stands at roughly $1.58 trillion (€1.34tn), just 26% higher than SpaceX-xAI, meaning Musk may derive more of his net worth from space and AI than from his electric car empire.
Tesla’s performance has slipped at the start of 2026. Shares are down about 6% after a 16% drop in January vehicle deliveries and a 3% decline in total 2025 revenue — its first annual contraction. Rising competition in Europe and China, combined with the end of U.S. federal EV tax credits, has pressured the automaker, while Musk’s political ties have also affected public perception.
Tesla Shifts Focus to Robotics
In response to declining EV sales, Musk is redirecting Tesla’s efforts toward robotaxi services and Optimus humanoid robots. Last week, he informed analysts that production of the Model S and X — which accounted for less than 3% of deliveries in 2025 — would cease, with lines repurposed for Optimus. The move underscores Tesla’s pivot toward technology-driven ventures as its traditional car business faces headwinds.
SpaceX Leads Amid New Regulatory Risks
SpaceX, in contrast, remains dominant in its core markets, securing multi-billion-dollar NASA and U.S. Defense contracts while operating the Starlink satellite network with over 9,000 satellites and roughly nine million customers. The recent merger values SpaceX at $1 trillion (€847bn) and xAI at $250 billion (€212bn), with Musk envisioning space-based data centers to reduce Earth-bound energy constraints.
However, the merger brings new risks. xAI faces regulatory investigations in the U.S., Europe, India, and Malaysia following misuse of its Grok image generator to produce explicit deepfake content, while French authorities recently raided X’s offices over alleged algorithmic abuse. Experts warn that some regulatory pressures could spill over to SpaceX, especially as Starlink operates internationally. While private ownership allows Musk to manage these risks for now, a public listing could raise investor concerns about the company’s high valuation alongside emerging political and legal challenges.
