Tesla and SpaceX Shares Drop as Texas Election Results Threaten Data Centre Expansion
Tesla and SpaceX shares extended sharp declines on Thursday after Democratic victories in Texas midterm elections threatened data centre expansion plans and the regulatory future of businesses linked to Elon Musk, radarr.africa reported.
Tesla and SpaceX Shares Slump After Election Outcomes
Tesla shares fell more than 11 per cent, while SpaceX shares dropped nearly 9 per cent. The combined market value of the two companies tracked toward a weekly loss exceeding $380 billion.
The market reaction followed election outcomes that strengthen political opposition to large-scale data centre projects in Texas. Both companies hold extensive business interests across the state.
Artificial Intelligence Expansion Drives Energy Infrastructure Demands
The regulatory uncertainty carries particular weight for SpaceX as artificial intelligence operations claim a larger share of its commercial footprint. AI computing generated more than half of the company’s third-quarter sales.
Tesla faces direct exposure to the infrastructure sector through its energy division. The division supplies battery storage systems designed to deliver reliable electricity to power-intensive computing facilities.
Goldman Sachs estimated that Democratic gains could trigger temporary restrictions on data centre development. These limits threaten to affect roughly 45 per cent of planned capacity expansion across the United States.
Political Shifts Complicate Semiconductor Manufacturing and Merger Plans
The election results also complicate development plans for Terafab, a proposed semiconductor manufacturing complex in Texas tied to Musk’s businesses. That project carries a projected capital investment reaching up to $119 billion.
Investors continue to evaluate the political fallout for a proposed corporate combination of Tesla and SpaceX. Musk previously characterized a merger as a positive move, and special committees at both companies have examined the structure.
Political shifts threaten to complicate regulatory approval for the transaction. Analysts cited by Reuters indicated that these approvals could face steeper hurdles in 2027.
While the midterm results do not immediately halt existing projects, tighter restrictions threaten to alter construction timelines, reshape investment decisions, and depress expected returns from upcoming developments.
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