Tesla and SpaceX: Navigating Post-Political Waters – Is Now the Time to Revalue?

The departure of Elon Musk from his controversial role as head of the Department of Government Efficiency (DOGE) under the Trump administration marks a pivotal moment for Tesla and SpaceX. With Musk's focus now squarely on his companies, investors face a critical question: Does this shift signal a rebound in value for Tesla (TSLA) and SpaceX's parent company, X (formerly Twitter), or does it merely delay confronting systemic challenges? Let's dissect the risks and opportunities.

The Political Exit: A Catalyst for Corporate Focus?

Musk's 130-day tenure at DOGE, which began in February 2025, ended amid controversy. The department's promise to slash $2 trillion in federal waste was scaled back to a mere $150 billion, with independent analyses (including NPR's reporting) questioning the validity of even those claims. Legal battles over data misuse and Musk's $300 million in political spending further strained public perception.

The stock market responded swiftly: Tesla surged nearly 6% post-announcement, as investors welcomed Musk's return to corporate priorities. Analysts like Wedbush's Dan Ives called this a “welcome relief,” noting that Musk's political entanglements had become a reputational liability. Yet, Tesla's stock had already fallen 11% year-to-date prior to this pivot, reflecting broader concerns about declining sales and regulatory hurdles.

Key trend: A volatile ride, with recent gains tied to Musk's refocus.

Tesla's Operational Reboot: Robotaxis and the Quest for Autonomy

Musk's return to Tesla coincides with a critical milestone: the June 2025 launch of its driverless Model Y robotaxi service. The company claims its Austin tests were flawless, with plans for factory-to-customer driverless deliveries by month-end. This rollout is existential for Tesla's valuation, as autonomous tech could redefine its moat in an increasingly competitive EV market.

However, challenges loom. European sales plummeted 49% YoY in April 2025, and Tesla's pivot away from lower-cost EV platforms (to focus on high-stakes projects like robotics) risks leaving gaps in its market coverage. Regulatory scrutiny of Full Self-Driving (FSD) technology remains unresolved, with agencies like the NHTSA and EU's EASA demanding proof of safety.

Morningstar's Seth Goldstein warns: “The robotaxi rollout is a binary bet. Success could catalyze a valuation uplift, but failure or delayed adoption could amplify existing headwinds.”

SpaceX: Musk's Moonshot Focus

While Tesla grabs headlines, SpaceX's trajectory under Musk's renewed attention could be equally transformative. With Starship's first orbital launch expected in 2025, the company aims to dominate the commercial space race. Musk has long framed SpaceX as a “multiplanetary species” enabler, and the Starship's potential to reduce launch costs could unlock new revenue streams—from satellite deployments to lunar tourism.

Critics, however, note that SpaceX's valuation (implied by private equity transactions) already reflects this optimism. Delays or cost overruns in Starship's development could test investor patience.

The Investment Thesis: Revalue Now – But Proceed with Caution

Opportunities:
1. Musk's Refocus: Eliminating political distractions allows Musk to concentrate on executing high-potential projects like robotaxis and Starship.
2. Market Sentiment Shift: The 6% post-announcement rally suggests investor optimism about Tesla's operational turn.
3. Long-Term Tech Dominance: Autonomous driving and space tech are multi-decade bets with massive addressable markets.

Risks:
1. Execution Hurdles: Robotaxis require flawless safety records and regulatory buy-in. A single accident or regulatory setback could crater confidence.
2. Economic Headwinds: EV demand is cyclical, and Tesla's premium pricing may struggle in a slowing economy.
3. Legal Lingering: DOGE-related lawsuits could still impact Musk's bandwidth and capital allocation.

Key insight: X's volatility underscores Musk's dual focus, but Tesla's fundamentals remain the clearer catalyst.

Final Call: Revalue Now – but Set a Watchlist

The exit from DOGE is a net positive for both Tesla and SpaceX. Musk's return to his companies has already boosted sentiment, and the robotaxi launch represents a tangible growth lever. For investors, this is a strategic revaluation moment—but one requiring patience.

Action Steps:
- Tesla: Buy on dips below $200/share, targeting the robotaxi rollout's success metrics.
- SpaceX (via X stock): Monitor Starship's progress; consider a position if valuation multiples contract further.

While risks remain, the alignment of Musk's focus with his companies' core missions creates a compelling asymmetry: upside potential outweighs near-term headwinds. The political chapter is closed. Now, the real mission begins.

Investors should always conduct their own due diligence. Past performance does not guarantee future results.