SpaceX vs Tesla: Which Is the Better Investment for UK Investors?

Table of contents

1. The basics: what each company actually does
2. Size and valuation
3. Revenue and profitability
4. The growth story
5. Risks
6. The Musk factor
7. Which is right for UK investors?
8. How to invest in both with XTB

The basics: what each company actually does

Tesla is an electric vehicle manufacturer that has spent the last decade repositioning itself as a technology and energy company. Its core business is designing, manufacturing and selling EVs, but the investment case now rests heavily on its autonomous driving software (Full Self-Driving), its energy storage and generation division, and its humanoid robot programme, Optimus. Tesla has been publicly listed on the Nasdaq since 2010 under the ticker TSLA.

SpaceX is a private aerospace company that went public in June 2026 under the ticker SPCX. It operates in three main areas: commercial rocket launch services, the Starlink satellite broadband network, and long-term deep space exploration. Following its February 2026 merger with xAI, it also encompasses Elon Musk's artificial intelligence business, including the Grok AI model and associated AI infrastructure, as well as the social platform X.

The simplest way to think about the difference: Tesla is a consumer-facing hardware and software business competing in large, established markets. SpaceX is an infrastructure and connectivity business that has built capabilities most competitors cannot replicate, operating in markets that are still in their early stages.

Size and valuation

Tesla currently has a market capitalisation of approximately $1.57 trillion, with shares trading around $420. SpaceX priced its IPO at $135 per share, targeting a valuation of $1.75 trillion — meaning it arrived on the public markets already larger than Tesla by market cap. 

That comparison is striking in itself. As of early 2026, SpaceX-xAI represented roughly 65% of Musk's total estimated net worth of $811 billion, per Forbes, compared to Tesla's roughly 25%. Musk himself, through the allocation of his own capital and attention, appears to have made his view clear.

But size is not the same as value. Both companies are priced for futures that haven't been delivered yet, and both carry valuation multiples that demand sustained exceptional performance.

Revenue and profitability

This is where the two companies diverge most sharply — and where investors need to look carefully.

Tesla has a substantial, established revenue base. First-quarter 2026 results showed revenue rising 16% to $22.4 billion year on year, a meaningful recovery after a difficult 2025 in which total revenue declined 3% from 2024 and automotive revenue fell 10%. Tesla is profitable on a GAAP basis, generates significant free cash flow, and has years of disclosed financial history for investors to analyse. 

SpaceX is a different picture. The company generated approximately $8 billion in profit on $15–16 billion in revenue in its last full year, with Starlink accounting for the bulk of that revenue. Those figures are compelling — but they come with important caveats. SpaceX is also investing enormous sums in Starship development, orbital AI infrastructure, and deep space exploration. The Motley Fool noted that SpaceX invested three times more on AI than on rockets last year and lost $6.3 billion on that segment. The consolidated picture is considerably more complex than the headline profit figure suggests.

On a valuation multiple basis, both companies are expensive. Tesla trades at a price-to-earnings ratio of over 220 — a multiple that assumes the autonomous driving and robotics businesses eventually deliver profits at scale. SpaceX at its IPO valuation trades at roughly 100 times its 2025 revenue — a multiple that prices in Starlink's continued rapid growth and the eventual commercialisation of Starship.

Neither is cheap. But they are expensive in different ways: Tesla is expensive relative to its current earnings; SpaceX is expensive relative to its current revenue.

The growth story

Tesla's bull case has three chapters. The first — that it would dominate electric vehicle sales globally — has become more complicated as Chinese manufacturers led by BYD have taken significant market share and forced Tesla into repeated price cuts. The second chapter, autonomous driving, remains one of the most debated questions in investing: the technology is advancing, but Musk cautioned during Tesla's first-quarter earnings call that the autonomous ride-sharing business won't be material this year. The third chapter, robotics and energy, is the most speculative — Optimus is still in early commercial production and the energy business, while growing, posted a 12% revenue decline in Q1 2026.

SpaceX's bull case is built on scarcity. Its Falcon 9 rocket has no direct commercial competitor at scale. Starlink is the only low-Earth-orbit broadband network with meaningful subscriber numbers — SpaceX estimates its total addressable market at $28.5 trillion, spanning broadband, launch services, and AI infrastructure. If Starship reaches full commercial operation, it could reduce the cost of reaching orbit by another order of magnitude, unlocking markets that currently don't exist. 

The bear case on SpaceX's growth story is that it requires sustained capital at enormous scale. Building out Starlink to global coverage, commercialising Starship, and developing space-based AI data centres will take years and billions of dollars — and the xAI AI segment is currently loss-making.

Risks

The risks facing each company are meaningfully different, and worth understanding before investing in either.

Tesla's key risks are competitive and execution-based. Chinese EV manufacturers are producing increasingly capable cars at lower price points, putting pressure on Tesla's margins and volume. The autonomous driving timeline is uncertain — Full Self-Driving has been "almost ready" for several years. And the valuation is almost entirely justified by future businesses (robotaxi, Optimus, energy) rather than the current car business, which means any delay to those timelines has outsized impact on the share price.

SpaceX's key risks centre on complexity and governance. The xAI merger has added a loss-making AI division to SpaceX's balance sheet, creating integration and financial risk that didn't previously exist. The dual-class share structure means public investors in SPCX have no meaningful governance rights — Musk retains approximately 82% of voting power. The company is newly public with limited financial disclosure history, and IPO-day pricing on a listing of this profile can reflect hype as much as fundamentals. There is also the lockup expiry to consider: when insider lockups expire 90 to 180 days after listing, selling pressure from early employees and investors typically follows.

Both companies share one risk: Elon Musk. His involvement is simultaneously their greatest strength and a concentration risk that has no parallel in most other investments.

The Musk factor

No comparison of these two companies can avoid addressing what is, for many investors, the central question: how much does the person at the top matter?

Musk's involvement in both Tesla and SpaceX has been the primary driver of their respective transformations. SpaceX would not exist in its current form without his willingness to invest his own money repeatedly when the company nearly failed. Tesla's pivot from niche luxury EV maker to technology company is substantially his doing.

As of early 2026, the combined SpaceX-xAI entity represented roughly 65% of his total estimated net worth, compared to Tesla's 25% — a signal that, if we take Musk's personal allocation as informative, he considers SpaceX the larger opportunity.

But concentration in one individual is a risk, not just an opportunity. Musk's public statements, political activities, and affiliations have demonstrably moved Tesla's share price — sometimes sharply downward. The same dynamic will apply to SPCX once it is publicly traded. Investors in either company are, to a significant degree, making a bet on one person's continued focus, execution, and public conduct over many years.

Which is right for UK investors?

There is no universal answer — these are different investments suited to different views and different risk tolerances.

Tesla is the more legible option. It has a decade of public financial history, an established revenue base, and clear near-term catalysts (autonomous driving milestones, Optimus commercial rollout, robotaxi launch). The valuation is high and the competitive environment is tougher than it was five years ago, but investors have significantly more information to work with.

SpaceX is the higher-conviction, higher-uncertainty option. The infrastructure moat in launch and satellite broadband is genuinely difficult to replicate. But it has just gone public, carries a valuation that prices in a very long runway of growth, and brings governance complexity through its dual-class structure and the xAI merger. Investors buying at IPO or shortly after are doing so with limited financial disclosure history compared to an established public company.

A practical consideration for UK investors: both TSLA and SPCX are US-listed stocks, meaning gains are subject to UK Capital Gains Tax above the annual allowance, and neither can currently be held within a Stocks and Shares ISA.

If you want exposure to both, one approach is to size positions according to your view on each thesis rather than choosing between them. They are not mutually exclusive — but they are different kinds of bets.

How to invest in both with XTB

Both Tesla (TSLA) and SpaceX (SPCX) are available to buy as shares through XTB. When you buy shares, you own them outright and benefit directly from any rise in the share price.

XTB also offers fractional shares, meaning you can invest a specific amount in either company rather than needing to buy a whole share — useful for managing position size when share prices are in the hundreds of dollars.

For investors with a higher risk appetite, CFDs on both stocks are also available. CFDs are leveraged instruments that carry a high risk of losing money rapidly and are not suitable for most investors.

Open your account today and invest in Tesla and SpaceX shares.

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