SpaceX Surpasses Expectations as Tesla Faces Pressure
Elon Musk’s SpaceX, now merged with his artificial intelligence venture xAI, has reached a $1.25 trillion (€1.06tn) valuation, narrowing the gap with Tesla, which is valued at around $1.58 trillion (€1.34tn). On paper, Musk now generates more wealth from SpaceX than from his electric car company.
Tesla’s stock has slipped about 6% in early 2026 following a 16% decline in vehicle deliveries in January and a 3% drop in 2025 revenue — the first annual decline in the company’s history. Competition in China and Europe, combined with the end of U.S. EV tax credits and Musk’s controversial political activity, has contributed to the slowdown.
Tesla Shifts Focus Amid Falling EV Sales
In response to weakening EV sales, Musk is redirecting Tesla toward robotaxi services and its Optimus humanoid robots, areas where the company has yet to establish a significant presence. Production of the Model S and X, which accounted for less than 3% of deliveries in 2025, will cease, with those assembly lines repurposed for Optimus. This pivot highlights Tesla’s effort to diversify beyond traditional car manufacturing.
SpaceX Leads While Risks Grow for xAI
SpaceX remains dominant in its core markets, holding multi-billion-dollar contracts with NASA and the U.S. Department of Defense. The company also operates the Starlink satellite internet network, with over 9,000 satellites and roughly nine million users. The merger values SpaceX at $1 trillion (€847bn) and xAI at $250 billion (€212bn), with Musk planning space-based data centers to reduce Earth’s energy constraints, though a full rollout faces significant technical and financial hurdles.
However, the merger introduces new risks. xAI faces regulatory scrutiny in Europe, India, Malaysia, and the U.S. following issues with its Grok image generator, which produced explicit deepfake content, and French authorities recently raided X’s offices over algorithmic abuse. Legal experts warn some of these challenges could affect SpaceX, especially given Starlink’s international operations. While privately held, these risks remain manageable, but a future public listing could test investor confidence amid regulatory and political uncertainties.
