SpaceX valuation nears Tesla's post xAI merger

Elon Musk's decision to merge SpaceX with his costly AI initiative, xAI, marks a shift in his corporate strategy.

Tesla has been the main driver of Musk's wealth and public persona. However, after the recent merger, Tesla's market value of roughly $1.58 trillion is only 26% more than SpaceX's private market worth of $1.25 trillion.

Musk holds about a 43% ownership in SpaceX compared to his 13% in Tesla. Consequently, SpaceX now constitutes more than half of Musk's estimated net worth, which has soared to over $852 billion, according to the Forbes Real Time Billionaires index.

Moreover, Tesla's value has been falling this year, with the stock dropping 6% since the start of 2026. 

In early January, Tesla announced a 16% decline in annual vehicle deliveries, and later in the month, disclosed that its total revenue decreased by 3% in 2025, marking its first year-over-year decline.

Tesla's main automotive division is currently facing challenges from increased competition with electric car manufacturers in China and Europe and the discontinuation of a US federal tax credit for EV purchases. 

Tesla's image has also been affected by Musk's political engagements, including collaborations with the Trump administration and alliances with far-right figures in Europe.

With weakening EV sales, Musk is attempting to pivot Tesla's priorities toward its Robotaxi ride-hailing service and Optimus humanoid robots, sectors that are heavily competitive and where Tesla has yet to establish a presence.

Recently, Musk informed analysts of the decision to cease the production of the Model S and X to reprioritise efforts. 

These older models accounted for less than 3% of Tesla's annual vehicle deliveries in 2025, and the company intends to repurpose their manufacturing lines for Optimus.