SpaceX and Tesla, tech giants led by Elon Musk, are feeling the financial pinch following significant Democratic victories in Texas. Stocks for both companies dropped over 4% premarket on Wednesday after Democrats secured several midterm wins, signaling potential challenges for Musk’s ventures headquartered in the state.
The results were particularly impactful, as James Talarico defeated Republican nominee Ken Paxton for a Senate seat, and Democratic candidate Gina Hinojosa unseated the long-serving governor, Greg Abbott. These political shifts may complicate Musk’s business dealings, given his substantial financial support for Republican figures.
Musk invested nearly $224 million in backing Republican candidates in Texas, with $158 million spent in September alone, according to The New York Times. Should the downturn in stock values persist as markets open, SpaceX and Tesla face the risk of losing over $140 billion in combined market value.
Musk had relocated SpaceX’s headquarters from California in 2024, citing frustrations with state regulations, and now confronts a familiar regulatory environment under new Democratic leadership. Tesla’s operations in Texas include the Austin gigafactory and a robotaxi service across several cities. SpaceX also conducts Starship launches from the Starbase facility in Boca Chica.
Wedbush analyst Dan Ives noted Musk must “find the path forward with Texas now with the Democratic win.” Musk, having contributed at least $446 million to Republican campaigns, was directly addressed by Talarico in a victory speech.
Reacting to the Democratic sweep, Musk joked on social media platform X about space-based data centers looking “pretty appealing right now,” adding humor about failed “election-interfering space lasers.”