Breakingviews - SpaceX will be a better $1 trln bet than Tesla

Robert Cyran - Reuters - 26/12
Rocket maker SpaceX’s internal $350 billion valuation makes it among the globe’s most valuable private startups. That’s still a fraction of the worth of boss Elon Musk’s electric-car company Tesla , which sports a $1 trillion market value. In 2025, though, it will become clear that terrestrial ambitions are no match for the stars.
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NEW YORK, Dec 26 (Reuters Breakingviews) - Rocket maker SpaceX’s internal $350 billion valuation makes it among the globe’s most valuable private startups. That’s still a fraction of the worth of boss Elon Musk’s electric-car company Tesla (TSLA.O), opens new tab, which sports a $1 trillion market value. In 2025, though, it will become clear that terrestrial ambitions are no match for the stars.
SpaceX encapsulates Musk’s philosophy: do something different, then cut costs to drive out the competition. Sure, Tesla’s 2006 “master plan, opens new tab” similarly pitched producing a premium car and then using the profits to drive down-market. But SpaceX’s growth is more explosive – and harder to catch.
The key is Starlink, SpaceX’s broadband satellite network. Its success is twofold. First, by building bigger rockets that can be reused, costs to launch tumble precipitously. Second, Starlink’s superior performance versus rivals ensures a revenue stream that justifies more launches. The company has around 7,000 satellites whizzing around Earth and is adding about 60 a week. From 1965 to the early 2010s, there was essentially no growth in manmade objects launch...
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