The first quarter of 2025 is in the books, and it’s impossible to deny that it went very poorly for Elon Musk.
The founder of Tesla (TSLA) temporarily eased shareholder anxiety when he announced plans to scale back his work with the Department of Government Efficiency (DOGE) and spend more time helping run his company. Since then, however, shares have dipped back into the red, indicating that the market isn’t convinced a turnaround is coming for TSLA.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter 💰💵
Tesla stock is still down more than 30% for the quarter due to the company’s dwindling sales, which can be attributed to backlash against Musk. His political affiliations have led many consumers to turn their backs on Tesla, severely compromising its dominance in the electric vehicle (EV) market.
The bad news for Musk doesn’t stop at Tesla, though. A prominent rival recently announced a milestone that could negatively impact one of his other companies.
Elon Musk is facing problems from companies other than Tesla as competition mounts.
Image source: Terence Lewis/Icon Sportswire via Getty Images
One of Musk’s rivals might beat him in an important race
While much of the nation’s focus has been on Tesla over the past few months, things haven’t gone so well for another company he runs. SpaceX is facing an increasingly complicated industry, as another leading tech company establishes itself as a sizeable threat.
Related: Elon Musk gets more bad news as rival launches the anti-Tesla
Amazon (AMZN) is more often associated with e-commerce and entertainment streaming than space technology or satellites. But the tech conglomerate recently made an announcement that likely made Musk extremely nervous: It has kicked off the launch of its internet-from-space network.
In 2021, Amazon joined forces with Verizon to create a satellite internet system that could challenge SpaceX’s Starlink. While the launch has been delayed, it finally happened this week when Project Kuiper, a satellite-internet subsidiary of Amazon, launched the first 27 satellites of its broadband constellation network.
“The satellites are the first of 3,236 that Amazon plans to send into low-Earth orbit for Project Kuiper, a $10 billion effort unveiled in 2019 to beam broadband internet globally for consumers, businesses, and governments — customers that SpaceX has courted for years with its powerful Starlink business,” reports Fast Company.
If Amazon’s expansion into this field continues, it could usher in a monumental change for the company. Already a leader in many areas, it would become known as a major telecommunications provider as its network helped provide broadband access to rural parts of the U.S.
More Elon Musk News:
Elon Musk faces accusations from major tech rivalTesla insiders, including someone unexpected, are dumping sharesAnalyst issues scathing take on Elon Musk and Tesla stock
Amazon has stated that it plans to “begin delivering service to customers later this year,” although no date has been specified. The company is expected to make contact with its new satellites in the near future from its mission control facilities.
Can Amazon’s Kuiper catch up to SpaceX’s Starlink?
So far, Starlink has had few challengers and has been able to dominate its market with little adversity. But a company with Amazon’s resources could be a formidable competitor, as long as it can keep pace with production goals, something that has reportedly proved challenge thus far.
Related: Controversial EV tax credits will be bad news for Tesla
It’s true that catching up with a company like SpaceX will be difficult, given the company’s presence in the industry and Musk’s powerful connections. However, that doesn’t mean it can’t be done. The same problems that have plagued Tesla in recent months will likely also apply to SpaceX.
As Bloomberg reports, “Its reputation has suffered since Musk began advising and financially backing President Donald Trump, and potential customers have said they see Kuiper as a welcome alternative.”
For that reason, Kuiper’s timing as it enters the satellite-based internet market may be opportune, as anti-Musk sentiment continues to cost him customers at multiple companies. Additionally, trust in SpaceX may be compromised following the company’s disastrous rocket launch earlier this year, which could also bode well for Kuiper.
As of now, it remains to be seen if Kuiper can compete with SpaceX and establish itself as a dominant force in the field. But with the strikes against Musk and his company piling up, it seems to be an excellent time to issue a challenge.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
