- Tesla and SpaceX shares fell over 3% in pre-market trading after US midterm projections favored Democrats
- Democrats are projected to gain control of both chambers of Congress, shifting the political landscape
- Elon Musk backed Republican candidates with about $474 million in the 2026 election cycle
Tesla Inc. and Space Exploration Technologies Corp. (SpaceX) shares came under pressure in pre-market trading on Wednesday as early projections from the US midterm elections pointed to a significant victory for Democrats, dealing a political setback to billionaire Elon Musk.
SpaceX shares were trading at $136.33, down $4.98 or 3.52% in pre-market deals, against their previous close of $141.31. Tesla shares were down 3.49% at $384.60, losing $13.90 from their previous closing price of $398.50.
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The selling pressure follows a sharp shift in the political landscape, with Democrats making substantial gains in key races and projections indicating that the party could take control of both chambers of Congress.
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According to Bloomberg, shares of Tesla and SpaceX had already fallen around 1.8% in after-hours trading on Tuesday after Democratic Senator Jon Ossoff was projected to win re-election in Georgia.
The election outcome could have wider implications for Musk's business empire, given his strong financial backing of Republican candidates and close association with US President Donald Trump.
Musk reportedly spent approximately $474 million backing Republican candidates during the 2026 election cycle, making him the biggest known donor in the campaign. The figure could be higher, according to campaign finance disclosures cited in media reports.
Texas emerged as a particularly significant battleground. Democratic candidates James Talarico and Gina Hinojosa were projected to defeat Republican candidates Ken Paxton and incumbent Governor Greg Abbott, respectively.
Musk had reportedly directed around $212 million towards Paxton's Senate campaign and another $12.3 million towards political groups in Texas, including at least $5.5 million for Abbott, according to campaign finance filings cited by CNBC.
A Democratic-controlled Congress could mean increased scrutiny of Musk's companies, particularly SpaceX, which has substantial government contracts with NASA and US national security agencies.
Democratic lawmakers have previously called for investigations into Musk's government contracts and his involvement in the Department of Government Efficiency (DOGE).
Tesla could also face closer regulatory attention over its autonomous driving technology and robotaxi ambitions. However, a change in congressional control does not automatically translate into immediate policy changes. Trump remains president, retaining executive powers and the ability to veto legislation.
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