Musk's Companies Stumble After US Midterms as Tesla and SpaceX Lose More Than $420 Billion in Combined Market Value

After the US midterm elections, shares of Tesla and SpaceX both plunged as investors worried that Elon Musk's companies could face stricter congressional scrutiny and regulation.

Since Election Day, the two companies have lost more than $420 billion in combined market value.

According to Forbes, Musk's personal fortune fell by about $90 billion over the past week to below $800 billion, though he remains the world's richest person.

Market value wiped out: Tesla and SpaceX have lost more than $420 billion in combined market value since Tuesday's close, with losses widening to about $456 billion by Thursday's close.

Share performance: On Thursday afternoon, Tesla shares were down about 11% and SpaceX about 9%.

Political donations: The Financial Times reported that Musk was the Republican Party's largest donor in the midterms, giving more than $470 million.

Election results: Democrats won control of both the Senate and the House, and most of the candidates Musk backed lost.

Texas operations face regulatory headwinds The election results pose a potential threat to Musk's business footprint in Texas.

Democrats scored victories in Texas, with Senator-elect James Talarico and Governor-elect Gina Hinojosa defeating Musk's longtime allies.

Deutsche Bank analysts said in a report that SpaceX could therefore face "incremental headwinds." The analysts noted in particular that Governor-elect Hinojosa made data centers a central campaign issue, calling for a pause on approving new data center projects until the legislature passes stronger protections on water use, electricity costs and local control.

This could affect the artificial intelligence infrastructure Tesla and SpaceX are building in Texas, including the large Terafab facility planned in Grimes County and SpaceX's "supercomputer" plans at Starbase, which could face delay risks and higher capital spending.

Starlink service and merger plans run into obstacles Beyond regulatory pressure in Texas, Musk's other businesses also face scrutiny.

According to CNN, Musk and SpaceX have been instructed to preserve records related to restrictions placed on a military version of the Starlink satellite internet service in Ukraine.

The restrictions are said to have weakened Ukraine's ability to defend against Russian attacks.

In addition, increasingly strict regulatory scrutiny could also hinder Musk's long-sought plan to merge SpaceX and Tesla.

Although he acknowledges the move would require shareholder approval, potential resistance from Washington would make the path to a merger more difficult.

Elon Musk listens to President Donald Trump speak at an event at the US Institute of Peace in Washington on Thursday, October 8, 2026.

AP Source: CNBC