Investor's Corner
Tesla to cut back presence in Hong Kong if Musk’s “beacon city” fails to adopt new EV incentives , says report
Tesla has reportedly submitted a letter to Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor, stating that it would reduce its presence in the country if previous tax credits for electric car buyers are not reinstated. The removal of a full registration tax waiver on electric vehicles was implemented last year by the HK government, causing a significant drop in electric car sales in the region of China.
Without the tax credits in place, electric vehicle prices have shot up by 50 to 80 percent in Hong Kong. Tax relief was also capped at HK$97,500 (US$12,466.35). These changes have ultimately caused the prices of vehicles like the Tesla Model S to increase significantly.
Since the tax credits were pulled out, Hong Kong saw a steep decline in the number of new EV registrations. In April 2017, the first month following the removal of the tax waivers, no registrations for electric cars was filed, causing companies such as Tesla to take heavy blows in sales. Tesla for one, only sold 32 Model S and Model X from April to December 2017, a massive decline from the 2,078 Model S and Model X it sold from April to December 2016.
In a statement to the South China Morning Post, an anonymous source claiming to have knowledge of the matter stated that Tesla is attempting to push back against the HK government. According to the source, the Silicon Valley-based electric car maker and energy firm is urging Chief Executive Carrie Lam Cheng Yuet-ngor to rethink the country’s position in the EV tax waiver issue. If the government does not budge, Tesla would reportedly begin scaling back its operations.
“Scaling down Tesla’s operation in Hong Kong is a natural and logical consequence if the number of customers has dwindled prompted by a reduction of government incentives. Without government support, who is willing to invest in green technology?” the source said, according to the Post.
While Hong Kong has maintained that the removal of the EV tax credits was due to traffic congestion and the fact that the majority of electric car owners were members of the upper class, critics of the government have speculated that the state had simply backed down amid pressure from legacy car makers. The Asia-based publication appears to have confirmed this recently, with another anonymous source from the local car industry stating that Tesla had simply gotten too successful in Hong Kong.
“The sale of Tesla cars in one month was equal to the annual sales figure of some petrol car brands. They all complained that the rapid growth of Tesla these few years had made their lives really difficult,” the source said.
Prior to the removal of the tax credits on electric vehicles, Hong Kong was one of the leaders in the electric car revolution in Asia, thanks in no small part to Tesla’s entry into the country. In a statement back in 2016, Tesla CEO Elon Musk expressed his optimism about Hong Kong being a leader in emissions-free transportation, calling Hong Kong a “Beacon City” for electric vehicles.
Musk’s statement definitely rang true, with electric car sales in the country experiencing a surge that saw registrations reach well into the thousands every year. By the time the Hong Kong government decided to discontinue the EV tax credits last year, there were 10,589 registered private electric cars in the region, with 2,964 of the registrations being filed in March 2017, the month right before the waivers were discontinued. A significant number of the country’s electric cars were Tesla Model S and Model X.
Below is a video of Tesla CEO Elon Musk speaking at a special event in Hong Kong in 2016.
https://youtu.be/12FVtZh5SLs
Elon Musk has firmly denied recent media reports suggesting that SpaceX has reduced its target valuation for an upcoming initial public offering.
The denial came directly from the SpaceX and Tesla frontman on his social media platform X, where he responded with a single word, “False,” to a post from ZeroHedge that cited Bloomberg sources.
This swift rebuttal underscores Musk’s ongoing effort to manage speculation surrounding one of the most anticipated market debuts in recent history.
False
— Elon Musk (@elonmusk) May 29, 2026
According to the disputed reports, SpaceX had lowered its IPO valuation goal to at least $1.8 trillion from previous ambitions exceeding $2 trillion.
The claims emerged amid growing anticipation for the company’s confidential S-1 filing, which positions it for a potential public listing as early as June.
Some had pointed to strong revenue growth, particularly from the Starlink satellite internet service, which contributed heavily to the firm’s 2025 figures of $18.7 billion. Yet challenges persist in other areas, including substantial investments and losses tied to ambitious projects like Starship development and artificial intelligence initiatives, which plan to make life multiplanetary eventually.
Musk’s response highlights a pattern in which he actively counters what he views as inaccurate portrayals of his companies’ trajectories.
SpaceX, already valued privately at extraordinary levels, stands as a cornerstone of Musk’s empire alongside Tesla and xAI. The entrepreneur has long emphasized the transformative potential of reusable rockets and global broadband access, factors that fuel investor enthusiasm despite operational hurdles.
By rejecting the valuation downgrade narrative, Musk signals confidence in SpaceX’s fundamentals and its readiness for public markets on terms favorable to its long-term vision. People have been waiting a very long time to invest in SpaceX, and the valuation, as well as the introductory share price, is not going to need adjusting.
They’ll have plenty of suitors.
This episode reflects broader dynamics in the technology sector, where rumors often swirl around high-profile entities. Musk’s direct engagement with media narratives serves to maintain transparency and control the narrative around his ventures.
As SpaceX prepares for greater scrutiny in public markets, the founder’s denial reinforces optimism about its prospects. Supporters argue that the company’s innovative edge positions it for enduring success, far beyond short-term valuation debates. With the denial now public, attention turns to forthcoming regulatory filings that could provide clearer insights into SpaceX’s strategy and financial health.
The coming weeks promise to reveal more about how SpaceX will transition into a publicly traded powerhouse.
Elon Musk
The Tesla and SpaceX merger everyone is talking about is quietly building
Tesla and SpaceX may be closer to merging than Wall Street or either company is admitting.
Elon Musk has reportedly discussed merging Tesla and SpaceX with people close to him, according to CNBC, which cited sources familiar with the conversation. Tesla employees have long expected such a transaction and the topic is openly discussed internally, according to internal sources. With SpaceX is days away from kicking off its Wall Street roadshow for what could be the largest IPO in market history, this would be the first time the company will have public market currency to execute a stock-for-stock deal with Tesla.
The financial logic for a merger would make sense. A combined SpaceX and Tesla would create a conglomerate spanning rockets, satellites, electric vehicles, AI infrastructure, and energy storage valued at roughly $3.35 trillion to $3.6 trillion based on SpaceX’s IPO target range and Tesla’s current market capitalization. The two companies are already more intertwined than most people realize. SpaceX bought $697 million worth of Tesla Megapack systems for xAI data centers and $131 million worth of Cybertrucks. Tesla invested $2 billion in xAI, which subsequently merged with SpaceX. Past transactions also include Tesla selling solar equipment and parts to SpaceX, and SpaceX helping with Cybertruck materials.
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Musk himself signaled where this was heading in November 2025 when he posted on X, “My companies are, surprisingly in some ways, trending towards convergence.” Tesla and SpaceX announced a joint semiconductor fabrication facility in Austin called Terafab on the Gigafactory Texas campus, covering two advanced chip factories, with one serving Tesla’s AI needs for vehicles and Optimus robots, the other targeting space-based data centers under SpaceX’s infrastructure vision.
Wedbush analyst Dan Ives places the probability of a merger at 80% to 90% with a target completion in the first half of 2027. The mechanics of a deal became possible the moment SpaceX filed its S-1. Legal experts said a merger likely would not spark antitrust issues but would raise concerns among shareholders in each company, with questions around which company would be the parent, how a stock swap would take place, and who determines the appropriate price. Musk holds about 20% of Tesla’s equity but controls 85.1% of SpaceX’s voting power through a super-voting share class, meaning he would largely be negotiating the terms with himself.
Not everyone is convinced the timing is imminent. Traders on Kalshi place only 33% odds that a merger will happen before May 2027. The more immediate concern for Tesla shareholders is whether the SpaceX IPO pulls capital and Musk’s attention away from Tesla before any merger consolidates the upside for both.
What is clear is that the structural groundwork is already being laid. The Terafab announcement, the xAI merger, the shared supply chain, the cross-company balance sheet transactions, and now the IPO all point in the same direction. Whether the merger follows in 2027 or later, the two companies are already operating more like divisions of a single entity than independent competitors.
Elon Musk
SpaceX just filed for the IPO everyone was waiting for
SpaceX filed its public S-1, revealing $18.7 billion in revenue and billions in losses.
SpaceX publicly filed its S-1 registration statement with the Securities and Exchange Commission on May 20, 2026, making its financial details available to the public for the first time ahead of what could be the largest IPO in history.
An S-1 is the formal document a company must submit to the SEC before going public. It includes audited financials, risk factors, business descriptions, and how the company plans to use the money it raises. Companies are required to file one before selling shares to the public, and it must be published at least 15 days before the investor roadshow begins. SpaceX had already submitted a confidential draft to the SEC in April, which allowed regulators to review the filing privately before it went public.
The S-1 reveals that SpaceX generated $18.7 billion in consolidated revenue in 2025, driven largely by its Starlink satellite internet division, which posted $11.4 billion in revenue, growing nearly 50% year over year. Despite that growth, the company lost about $4.9 billion in 2025 and has burned through more than $37 billion since its founding.
SpaceX just forced Verizon, AT&T and T-Mobile to team up for the first time in history
A significant portion of those losses trace back to xAI, Elon Musk’s artificial intelligence company, which was recently merged into SpaceX. SpaceX directed roughly 60% of its capital spending in 2025 to its AI division, totaling around $20 billion, yet that division lost billions and grew revenue by only about 22%.
SpaceX plans to list its Class A common stock on Nasdaq under the ticker SPCX, with Goldman Sachs, Morgan Stanley, and Bank of America leading the offering. The dual-class share structure means going public will not meaningfully reduce Musk’s control, as Class B shares he holds carry 10 votes per share compared to one vote for public Class A shares.
The company is targeting a raise of around $75 billion at a valuation of roughly $1.75 trillion, which would make it the largest IPO ever. The investor roadshow is reportedly planned for June 5.
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