Elon Musk Faces Challenges as Tesla Struggles, X Underperforms and SpaceX Maintains Growth
New Delhi (The Uttam Hindu): Elon Musk, the world's richest person, is encountering a difficult period as Tesla's stock plummets, his political ties attract scrutiny, and operational issues escalate at X (formerly Twitter). Despite the growing political influence, Musk's business ventures have faced a mix of triumphs and setbacks. Previously, Tesla and Musk’s other businesses benefitted from the excitement surrounding Donald Trump’s re-election campaign, but now, Musk’s increasing political involvement seems to be having unintended consequences.
Tesla, which experienced a stock surge after Trump’s 2020 victory, has seen a dramatic drop in its stock value. The company’s shares have fallen 25% in the last month, 12% in three months, and 28% year-to-date, causing Tesla's market capitalization to drop below $1 trillion. Although the stock was up 40% over the past year, the 20% slump in recent times has caused concerns. Tesla has also encountered multiple operational setbacks, including supply chain disruptions and attacks on its German factory, resulting in a decline in production and sales.
SpaceX, Musk’s aerospace company, continues to thrive due to a steady stream of government contracts and commercial projects. However, Musk’s other ventures, including X, are facing significant challenges. Despite his $380 billion fortune, Musk has lost over $100 billion in net worth over the past decade, with Tesla’s declining performance being a major contributor. Additionally, Tesla's challenges have been compounded by global trade tensions, tariffs, and competition from traditional automakers and newer electric vehicle (EV) companies like BYD.
Tesla faces increasing competition, particularly from BYD, which has emerged as a formidable rival in China and globally. By the end of 2024, BYD sold more EVs than Tesla, and in the first quarter of 2025, BYD’s growth continues to outpace Tesla’s declining sales. Critics also argue that Tesla's product lineup has stagnated, with competitors offering innovative alternatives.
Meanwhile, Musk’s takeover of Twitter, now rebranded as X, has struggled financially. X has seen a massive decline in advertising revenue, falling 46.4% from $4.5 billion in 2022 to $2.2 billion in 2023. As a result, major advertisers have abandoned the platform, contributing to a 60% drop in US ad revenue. Musk’s shift towards a subscription-based revenue model has not proven successful yet, and X remains far from profitable. However, Musk’s venture into artificial intelligence with xAI could provide a potential lifeline for X, as the platform seeks to raise funds at a valuation of $44 billion.
Despite the financial difficulties faced by X, SpaceX remains strong. With a growing number of government contracts and a robust commercial spaceflight business, SpaceX continues to dominate the space industry. The expansion of Starlink and the increase in government-backed missions further solidified its position. However, competition in the aerospace sector continues to intensify.
Elon Musk's increasing involvement in politics, his business ventures, and regulatory challenges continue to shape his financial empire, creating a mixed outlook for his various companies. While SpaceX flourishes, Tesla and X face significant hurdles that could have long-term implications for Musk’s fortune and influence.
