In the past few months, Tesla (TSLA) has experienced a dramatic decline in its market capitalization, with a staggering loss of approximately $800 billion. This downturn is largely attributed to a broader market slump as well as internal hurdles the company is facing. Despite these challenges, CEO Elon Musk retains his position as the richest person in the world, primarily due to his significant investment in SpaceX, which has now become a critical component of his $307 billion wealth, eclipsing even Tesla. Bloomberg reports that Musk’s 42 percent ownership of SpaceX, held through a trust, is estimated to be worth around $136 billion.
Most recently, SpaceX reached a valuation of $350 billion following a funding round in December, solidifying its status as the most valuable privately-held company in the United States. The firm primarily specializes in the manufacturing of rockets and satellites, generating revenue through launching missions for a variety of clients and offering its Starlink satellite internet service. This year, Starlink is projected to generate $11.8 billion in revenue, including $3 billion from contracts with the U.S. military.
Musk’s influence stretches into the realm of government, where he serves as the head of the Department of Government Efficiency (DOGE), a position that has transformed federal procurement practices to benefit his businesses. Reports suggest that President Trump is advocating for the Federal Aviation Administration (FAA) to redirect a $2.4 billion broadband contract from Verizon to SpaceX’s Starlink service. Following lobbying from Musk’s team, the FAA has agreed to incorporate Starlink into its plans, according to an insider from the General Services Administration.
In a strategic development, Starlink has recently forged partnerships with India’s leading telecom giants, Airtel and Reliance’s Jio Platforms, shortly after Musk’s meeting with Indian Prime Minister Narendra Modi. At the same time, Tesla announced intentions to bolster its presence in India with plans to open new showrooms.
However, Musk’s ties with the U.S. government haven’t been without their complications. For instance, Ontario province in Canada recently terminated a $68 million contract with Starlink, citing deteriorating relations with the Trump administration as a contributing factor.
While SpaceX continues to flourish, Tesla is encountering obstacles. Although global electric vehicle sales are on the rise, Tesla’s sales have dipped in critical markets. Contributing factors include Musk’s political affiliations, particularly his backing of the far-right AfD party in Germany, which has negatively impacted sales in Europe. In China, Tesla is grappling with a five-month sales slump, losing ground to local competitors.
In a recent public show of support, President Trump defended Musk and Tesla during a press conference, denouncing calls for boycotts against Musk’s companies. Trump expressed his confidence in Musk’s business ventures and even pledged to buy a Tesla himself as a sign of solidarity.
