Tesla and SpaceX Lose Over $420 Billion Amid Tech Sell-Off and Election Jitters

More than $420 billion in market value vanished from Tesla and SpaceX in the two days after the midterms, as investors weighed Democratic victories alongside a broad tech sell-off. By Thursday afternoon, Tesla shares had fallen about 9% and SpaceX shares about 11%, though reports put the companies’ combined losses at different totals depending on the trading time used. ^9,11

Texas was central to the market’s nerves. Voters there elected Democrat James Talarico to the Senate and Democrat Gina Hinojosa governor, defeating Ken Paxton and Greg Abbott, two Republicans backed by Musk. Musk spent at least $445 million supporting Republican candidates and groups nationwide, with at least $224 million going to Texas, according to campaign finance reports. He also gave $5 million to Abbott’s campaign. ^10,13

That spending failed to secure the political allies Musk’s companies have relied on in Texas. Tesla and SpaceX are expanding data centers and other AI computing projects there, and the companies are considering a merger. Hinojosa campaigned for limits on new data centers, citing water use, electricity costs and tax breaks. Investors worry that new rules could slow projects or raise costs. Democrats’ control of Congress also gives them greater power to investigate Musk’s government role, federal contracts and company dealings. ^6,11,16

Those investigations are possible, not yet completed. The market decline also came amid a steep sell-off in tech and AI stocks, so election fears are not the only factor behind the losses. Musk’s political spending was tiny compared with his reported fortune, but the defeats could still affect decisions about his businesses. Congress can now use its new majority to decide whether to investigate, while Texas lawmakers will shape rules for data centers and company incentives. ^1,9