Shares of Tesla and SpaceX fall after Elon Musk's midterm election bet backfires

In the 2024 midterms, Democrat James Talarico secured a surprising victory in Texas' Senate race, marking the first time the seat flipped Democrat since 1988. This upset dealt a significant blow to Republicans, including Elon Musk. Musk's political action committee (PAC) donated $47 million (£35 million) to Republican Ken Paxton's campaign, in addition to $158 million given to the Senate Leadership Fund.

Despite this substantial financial support, Musk's efforts did not prevent Talarico from winning. Talarico celebrated his win, stating: "We just proved that all the money in the world is no match for the people of Texas." Musk playfully commented on X, saying, "Guess my election-interfering space lasers didn't work this time." The Democrats gained control of the US Congress following Talarico's victory, reflecting the rejection of Trump's Republican candidates in a wave of wins across the United States.

Musk has been increasingly focused on Texas, with Tesla's Austin headquarters and SpaceX's Starbase launch site in the state. Musk also backed Paxton through outside groups and used his platform to spread conspiracy theories about Talarico. Talarico responded to Musk's comments, questioning the integrity of the political system.

Musk was the top individual donor in this year's midterms, contributing an estimated $446 million to Republican candidates through Super PACs. Super PACs can raise unlimited sums but cannot give directly to candidates or coordinate with their campaigns. Musk became one of the Republican Party's biggest donors in 2024, pouring money into Donald Trump's presidential campaign, but his financial backing was not sufficient to secure victory in this Senate race.