As Tesla stumbles, SpaceX’s finances go from strength to strength

Collapsing electric-vehicle sales, political fallout and an AI chatbot publishing anti-Semitic posts — much of Elon Musk’s business empire is in disarray.

A SpaceX rocket lifting off last month in Florida. Picture: Jennifer Briggs/Zuma Press/WSJ

Collapsing electric-vehicle sales, political fallout and an AI chatbot publishing anti-Semitic posts — much of Elon Musk’s business empire is in disarray.

But the executive’s rocket-and-satellite company remains as dominant as ever, riding high on the strength of technologies that rivals haven’t mastered and deep relationships with US government officials.

Privately held SpaceX has been working on a sale of employee shares that would value it at $400 billion, up 14 per cent from six months ago, according to people familiar with the situation. Bloomberg reported earlier on the new valuation.

Musk, who controls SpaceX with a more than 40 per cent stake, recently projected close to $16 billion in revenue at the company this year. That would be up more than three times versus 2022. Its Starlink satellite business has stoked those gains with a rapid global expansion.

Meanwhile, SpaceX is sitting on more than $3 billion in cash, which has helped the company to expand without raising new capital, people familiar with the matter said.

SpaceX has carved out powerful positions on several fronts. Its launch division frequently handles high-stakes government and commercial missions. The company has reeled in major wins through Starshield, a national-security satellite effort. Starlink, a huge satellite-internet network, now has around 8,000 satellites speeding through low-Earth-orbit.

“I hope others can catch up. Competition is good for industries,” SpaceX President Gwynne Shotwell said at an investor event in November. “On launch, and both satellite production and deployment, we are ahead.” One of the big questions right now at SpaceX is Starship, the vehicle Musk has said would reach Mars years ago. Engineers and technicians are wrestling with repeated failures of the experimental rocket, including an explosion last month in Texas that shook homes miles away.

The company has also been plunged into fights between President Trump and Musk, the most recent of which followed the executive’s promise to start a new political party.

Trump has threatened to cut billions of dollars in contracts between the government and Musk-tied businesses, a move that would roil SpaceX.

SpaceX didn’t respond to a request for comment.

SpaceX operates a vehicle, called Crew Dragon, that is the only US spacecraft flying astronauts to and from the International Space Station. That dependency generated anxiety inside the National Aeronautics and Space Administration when Musk briefly threatened to cancel the ship as he fought with the president last month.

Starlink’s new connections

A growing part of the Texas-based company’s financial power is rooted in Starlink.

The satellite network providing high-speed internet connections is used by everyone from the Ukrainian military to campers streaming television shows in the wilderness.

Earlier this month, the company said it was connecting more than six million people around the world through Starlink. A Starlink business covering the company’s international side, along with some US-related sales, saw 2024 revenue nearly double to $2.7 billion from the year earlier, according to a company document viewed by The Wall Street Journal.

“In the context of a satellite industry that does not grow fast, this is amazing growth,” said Tim Farrar, an analyst who has long tracked satellite operators.

Donald Trump has threatened to cut billions of dollars in contracts between the government and Musk-tied businesses, a move that would roil SpaceX. Picture: AP Photo/Evan Vucci

While Tesla sales have shrunk dramatically across Europe, Starlink continued to grow, with revenue shooting up to $744 million in 2024, from $367 million the previous year, according to the document viewed by the Journal. Across Africa, a nascent market, revenue topped $100 million, up from about $19 million.

Starlink is poised to continue pulling in customers overseas, at least for now. Shotwell, who has talked about winning a 3 per cent share of the global broadband market for Starlink, recently met with officials about starting service in India, according to posts she and an Indian government minister recently put up on X. SpaceX has long viewed India as crucial for Starlink, given its massive population and growing economy.

Starlink still faces many challenges. The company is able to charge much more for monthly service in wealthier countries than developing markets, but most of the population in places like the US live in areas where traditional internet access is available at cheaper costs.

User terminals for the service are also expensive. A recent search for US addresses showed costs at $349 for that equipment, and Farrar, the satellite-industry analyst, estimates the company must subsidise their costs to spur consumer access. Starlink isn’t allowed to offer service in China, one of the largest international markets.

Getting Starship on track

SpaceX’s dominant businesses provide a big cushion for the company as it grapples with one of the toughest challenges in its more than two-decade history: making Starship work.

The company eventually wants to stop producing its current fleet of rockets and vehicles entirely, switching over to Starship, current and former employees have said. Getting there is proving tougher than many at the company expected.

The complex vehicle has failed during three consecutive flight tests this year. Last month, a Starship spacecraft exploded during an engine test on the ground, leaving equipment destroyed and a test site unusable.

The setbacks ramp up pressure on SpaceX as it pours billions into the Starship program. NASA is depending on the rocket to handle planned astronaut moon-landing operations, and the company’s own plans to fly huge Starlink satellites on the vehicle are in limbo.

While Starship is on the ground, the company is limited in its ability to generate revenue from it and fully take advantage of infrastructure supporting the rocket.

That is something SpaceX is all too aware of. In a court filing last year, SpaceX fought an injunction that sought to restrict Starship launches from Texas, warning of the financial hit if it couldn’t fly the vehicle.

“Each day that SpaceX is unable to perform its Starship-Super Heavy launch operations will cost SpaceX millions of dollars,” the company said in the filing.

Wall Street Journal