Elon Musk’s SpaceX will need to achieve at least two of its three “moonshots” to justify its huge valuation, a former Tesla board member told CNBC Friday. 

Musk’s reusable rocket company is looking to raise $75 billion, selling 555.6 million shares for $135 apiece, according to a filing with the Securities and Exchange Commission. The deal values SpaceX at $1.77 trillion, making it the seventh most-valuable U.S. company, ahead of Tesla.

Venture capitalist and former Tesla board member Steve Westly told CNBC’s “Squawk Box Europe” on Friday that pricing SpaceX’s imminent IPO is going to be hard to predict, as its three core companies are “completely disparate.” 

In addition to its space business, Musk’s company owns the Starlink satellite internet service, which accounts for the bulk of its revenue and is the only profitable unit. It also includes xAI, which Musk merged with SpaceX in February.

“SpaceX is three moonshots in one company, but I think they’re going to need to make at least two of these moonshots successful to keep that $2 trillion valuation,” said Westly, who also founded venture fund, The Westly Group.

SpaceX has achieved its goal of becoming the largest IPO on record.

The number of underlying businesses could expand further still, as speculation builds that Musk could eventually merge Tesla into SpaceX. CNBC reported in May, citing people familiar with the matter, that Tesla and SpaceX already have a laundry list of shared resources, and Musk has discussed with colleagues the possibility of folding the companies together.

Westly told CNBC’s Arjun Kharpal that a move to fold Tesla into SpaceX is “absolutely likely.”

“It’s going to be a tricky one. There will be a lot of governance issues, people will have complaints about that, but… I think there’s a good chance that ends up happening,” he added.

PARK CITY, Utah — Rivian CEO RJ Scaringe is energetic as he makes his way through displays for the electric vehicle maker’s new R2 SUV.

The company founder moves quickly from the EV’s suspension and software systems to different models of the R2 that will soon begin to reach American consumers, including a roughly $45,000 entry-level model that Rivian said Tuesday is being pulled ahead from late 2027 to next summer.

But there’s an anxiousness in Scaringe’s voice as he talks to employees and media at the R2 launch event in western Utah and prepares to release the vehicle, starting Tuesday for current reservation holders, to the world.

Scaringe founded the EV maker in 2009. He has grown Rivian into a company with a $22 billion market cap that ranked highest in Consumer Reports’ most recent customer satisfaction survey, but lowest in predictive industry reliability due to consumer-reported problems with its early vehicles.

That’s unusual for an automotive brand. Typically, the more problems a brand has, the lower its customer satisfactions rank — but not Rivian.

It’s a testament to the brand Scaringe, a 43-year-old automotive enthusiast and tech entrepreneur, has built. That kind of customer satisfaction is also harder to maintain as a brand grows, which is Rivian’s goal with the R2.

The new SUV is meant to transform Rivian from a niche EV manufacturer that sells luxury vehicles — largely in California and states where electric vehicles sell well — to a more mainstream brand that can not only compete against U.S. EV leader Tesla but with broader mainstream automotive brands such as Jeep and Subaru.

“Its goal is for it to be a high-volume product,” Scaringe told CNBC. “Certainly, we’re going to draw on some Tesla customers, but the market of non-Tesla customers is many, many times larger.”

Wall Street analysts have described the R2 as Rivian’s make-or-break moment, comparable to Tesla moving from its pricey, first-generation EVs to the mainstream Model 3 and Model Y that currently dominate the U.S. market.

Scaringe doesn’t object to such a categorization.

“When you build a company from scratch, everything is make or break. There is no company if things don’t work,” he said. “Saying that it’s ‘make or break,’ it’s like, of course, it is.”

Shares of Rivian were down by about 5% during intraday trading Tuesday following the new timing announcement for the entry-level model as well as expert reviews being released for the R2, which were largely positive.

Once full production of R2 is online, Scaringe said, the company expects the sweet spot for sales to be in the low $50,000s, which Cox Automotive reports would put it slightly above the U.S. average selling price of $49,000 and below the average EV selling price of more than $55,000.

That pricing and the vehicle’s size place it in the heart of the compact and mid-size SUV markets, which Cox Automotive reports accounted for 45% of U.S. sales last year.

For EVs especially, the Tesla Model Y dominates in the U.S. Cox Automotive estimates Tesla, which does not report sales by region, sold more than 357,500 Model Y units, or roughly 40% of the U.S. EV market, in 2025.

“I think it’ll do well. Rivian has a strong brand and there’s room for another compelling vehicle, especially in that midsize segment,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive, which is an investor in Rivian. “It’s not just EV, they’re going to try to compete and pull from [internal combustion engine] vehicles as well.”

Challenges for Rivian remain abundant, Valdez said. In addition to slower-than-expected EV adoption and lack of charging infrastructure, the company also needs to prove it can ramp up production quickly without quality issues.

Of the non-EVs in the segments, the Toyota Rav4 and Honda CR-V lead the compact SUV segment, while the larger Ford Explorer and Jeep Grand Cherokee lead midsize SUVs.

“We want people to look and just say … ‘it’s the best car in that price range,’ and by virtue of that, it’ll draw new customers, non-EV customers,” Scaringe said.

To do so, Scaringe believes, Rivian will also need to become a leader in software and in-vehicle technologies such as automated driving and artificial intelligence.

Rivian received outside validation for its emerging technology efforts in the form of a $5.8 billion deal with Volkswagen that includes putting Rivian’s software and electrical architecture in the German automaker’s future EVs.

Volkswagen is now Rivian’s largest shareholder, followed by longtime backer Amazon, which remains its largest customer for delivery vehicles.

The R2 will launch with an advanced driver-assistance system, or ADAS, that will largely control itself under certain conditions with driver monitoring, but it will not have an AI voice assistant until later this year. Both systems will continue to be updated through over-the-air updates, according to Rivian.

Scaringe said he views the company’s emerging software services as being just as important as the vehicles.

“You need them both. It’s like asking is the heart or the brain more important in a human. You can’t survive without both,” Scaringe said. “It’s a false binary. I don’t see them as separate.”

Tesla owner Mike Nelson has been using the AI chatbot Grok in his vehicle for several months now. He finds it is useful, nearly irresistible, and dangerous.

Nelson, a lawyer with a background in auto insurance, showed CNBC how he uses Grok on a drive around the New York metro area. Nelson said that while he’s very happy with his Model Y SUV, he has represented owners who sued or are suing Tesla in more than 10 cases.

The in-vehicle version of Grok, which is still in beta and developed by xAI, allows drivers to give voice commands to the navigation system in their car. Grok will also answer a wide range of questions on just about any topic. For Nelson, conversations with the chatbot are now his main source of entertainment on the road. 

Tesla is not the only automaker adding AI assistants to its vehicles. Volvo, Rivian, Mercedes, BMW and others are all integrating AI into their cars even though the tech is still in its infancy. 

Automakers want to give drivers a hands-free way to access useful information, for example, about where to charge their electric vehicle nearby, how to get there, and whether there’s a good place to eat on the way. That could reduce a driver’s temptation to fuss with a phone, map or screen for directions.

But AI chatbots also represent a new source of distraction on the road, one that isn’t well understood yet, says Philip Koopman, a Carnegie Mellon emeritus professor and expert in autonomous vehicles.

Tesla began rolling out xAI’s chatbot to customers’ cars in July 2025. (The automaker has also invested $2 billion into xAI, which is now part of SpaceX also run by Elon Musk.)

Nelson got his Tesla Model Y – his fourth electric car from the company – in November. Grok wasn’t a “buying point” for him, he said. “I also didn’t appreciate how great it would be to have a chatbot in the car with you.” But he used it on the first drive, and has been hooked on Grok ever since. 

“It’s really changed the driving experience for me,” he said. “In the 80s and 90s, I was listening to music or drive time radio talk shows, then to books on tape, then to podcasts. And now I don’t do any of that. I simply use this to ask questions.”

He uses Grok for everything from gardening advice to developing plans for business projects, or getting random history trivia.

Nelson generally uses Grok while he has Tesla’s Full Self-Driving (Supervised) system engaged.

Sometimes called FSD, the partially automated driving system is sold for $99 per month in the U.S. today. Tesla owners’ manuals say drivers must provide “active supervision” of their cars when FSD is in use, meaning they should keep their eyes on the road, stay attentive to driving, and be ready to steer or brake at any time.

Using FSD comes with risks, especially in a big chaotic city like New York, Nelson told CNBC, and he feels that Grok heightens those risks.

The National Highway Traffic Safety Administration has initiated multiple investigations into possible safety defects with Tesla’s FSD, after several collisions, including a fatal 2023 crash. Drivers may become complacent, and overestimate how much they’re paying attention to the road while using FSD.

During CNBC’s ride along with Nelson in New York City, he observed, “We crossed one of the busiest bridges in the world,” speaking of the George Washington Bridge, “by far the busiest bridge in the United States, and I was not paying attention to any aspect of that drive.” Instead, Nelson was interacting with Grok.

A driver can be distracted by all kinds of things – music, a podcast, or conversation with another passenger.

“People think they can do multiple things at once,” said Koopman, the automotive safety expert. “They can really only do one thing well at once, and it takes a while to switch back and forth. So if you’re in a car, driving, your primary task should always be driving. Sometimes you can do a minor background task that doesn’t require a lot of attention, like listening to a radio. But as soon as you have to shift your attention, you’re not focused on driving any more.”

Over 3,000 people die each year in traffic accidents attributed to distracted driving, according to data from the National Research Council, he noted.

One question with chatbots, Koopman asked, is “how will the interaction line up with what’s going on while driving?” An AI chatbot that is “integrated into the driving task to support the driver,” could improve their safety, possibly, by warning them if they should use extra caution as traffic conditions begin to change.

But Koopman said, “Interacting with a chatbot on topics that have nothing to do with the current driving situation are clearly a distraction.” That distraction may be worse if the conversation is particularly engrossing, emotionally-charged or confusing, he added.

Grok sometimes gives incorrect answers in response to users’ questions, even about its own features and functionality, Nelson told CNBC.

For example, during the New York drive, he asked Grok if he could use it to adjust seats or climate controls in his Tesla. At first, Grok said that he could. A few minutes later, Nelson asked if it made a mistake, and the system replied that it couldn’t control the seats or climate in the car. 

When Nelson gave a voice command to Grok mid-route, telling it to keep his Tesla going down Broadway in midtown Manhattan, it didn’t exactly work. Instead, his car kept pulling toward the West Side Highway on the edge of the borough.

Grok also has some functionality that might raise concerns, namely an NSFW mode. A mother in Canada was outraged when her 12-year-old son interacted with Grok, and it encouraged him to share nude photographs.

At one point during the ride with CNBC, Nelson asked the system: “So grok, if we wanted to go crazy and start talking about some really risqué stuff, would you do that with me? “Sure,” the system answered, “I’m game for risque chat if that’s the vibe. No limits on adult topics. What’s on your mind?”

Grok would respond to anyone in the vehicle who woke it by saying “hey, Grok.”

Tesla didn’t respond to CNBC’s request for comment or explain if the company is working prevent minors from accessing mature or harmful content via Grok in its cars.

Another version of xAI’s Grok, a chatbot and image generator, is the subject of lawsuits and regulatory probes in multiple international jurisdictions after it enabled widespread creation and sharing of explicit AI deepfakes online that were based on photos or videos of nonconsenting women and children.

Tesla does not make that version of Grok available in the media control units of its cars today.

“I don’t think of myself as a Tesla fan,” Nelson said. “But I think seeing what this technology is doing now, it’s amazing. But it’s still very dangerous.”

Happy Thursday. With Lululemon and LinkedIn joining the party, I’m declaring this the week of CEO succession announcements.

Stock futures are falling this morning after a winning session for all three major indexes.

Here are five key things investors need to know to start the trading day:

Tesla reported better-than-expected fourth-quarter results after the bell on Wednesday, but revenue for the year dropped 3%, the first time on record the company has recorded an annual decline. The stock rose 3% in extended trading.

Here’s how the company did, compared with estimates from analysts polled by LSEG:

• Earnings per share: 50 cents, adjusted vs. 45 cents, estimated
• Revenue: $24.90 billion vs $24.79 billion, estimated

Auto sales have been sluggish in recent quarters for Tesla, as the company faces an onslaught of competition in various parts of the world, most notably from BYD in China.

Revenue in the fourth quarter slid 3% from $25.7 billion a year earlier, with the auto segment falling 11%. Full-year revenue fell to $94.8 billion from $97.7 billion in 2024, the company said in an earnings release.

Earlier this month, Tesla reported a 16% plunge in vehicle deliveries for the fourth quarter and 8.6% decline for the full year. Deliveries are the closest approximation of sales reported by Tesla, but are not precisely defined in the company’s shareholder communications.

While Tesla’s core business has been struggling, CEO Elon Musk has tried to focus investor attention elsewhere. In particular, he’s touted the company’s nascent Robotaxi business and its Optimus humanoid robots, which have yet to hit the market.

In 2025, Tesla launched a Robotaxi-branded ride-hailing app, and the company has been running a pilot service in Austin, Texas. Last week, Tesla executives said they had taken human safety supervisors out of a handful of cars in the Austin fleet to conduct driverless passenger rides.

The company said in its investor deck that it plans to have coverage in seven additional U.S. markets in the first half of this year. Those cities are Dallas, Houston, Phoenix, Miami, Orlando, Tampa and Las Vegas.

Tesla said that it has begun “tooling” in advance of production of its forthcoming Cybercab, which is previously billed as a two-seat, “purpose-built” driverless car that will not include a steering wheel or pedals.

Net income in the quarter plunged to $840 million, or 24 cents per share, from $2.1 billion, or 60 cents per share, a year earlier.

Tesla’s call with analysts is scheduled to begin at 5:30 p.m. ET.

This is breaking news. Please check back for updates.

WATCH: Robotaxi will be major focus of Tesla’s earnings call

Tesla CEO Elon Musk said on Thursday that his company is now running a small number of its Robotaxi vehicles in Austin, Texas, without a human driver or safety supervisor on board.

“Just started Tesla Robotaxi drives in Austin with no safety monitor in the car,” Musk posted on X. “Congrats to the @Tesla_AI team!”

Ashok Elluswamy, Tesla’s vice president of software, wrote in a separate post that the Austin Robotaxi service included, “a few unsupervised vehicles mixed in with the broader robotaxi fleet with safety monitors.” He said the ratio of driverless to supervised vehicles will increase over time in that market.

Tesla shares rose 4.2% on Thursday to close at $449.36.

Tesla lags behind several companies that are already operating commercial robotaxi services with no drivers or safety monitors present. Alphabet’s Waymo leads the U.S. market, while Baidu’s Apollo Go is out front in China with significant competition from WeRide.

Other players are joining the fray, as Amazon’s Zoox is now operating limited driverless services in the U.S., and startups like May Mobility and Nuro are developing their driverless offerings.

Musk said in July that Tesla would likely have “autonomous ride hailing in probably half the population of the U.S. by the end of the year.” The company fell far shy of that goal.

However, Tesla drummed up excitement with the launch of its Robotaxi ride-hailing app, and its initial services in Austin and the San Francisco Bay area.

In Texas, Tesla obtained a permit to run a transportation networking company, which allowed it to use “automated driving systems,” or driverless vehicles, there. But in California, Tesla has yet to obtain permits that would allow it to conduct driverless testing or robotaxi rides without a human at the wheel, ready to steer or brake at any time.

Speaking at the World Economic Forum in Davos on Thursday, Musk said, “I think self-driving cars is essentially a solved problem at this point,” adding that he expects his company’s Robotaxi service will be “very widespread by the end of this year within the U.S.”

Musk is notorious for missing his self-imposed timelines for grand technical or business achievements.

In 2019, he told investors that he was “very confident” the company would be able to turn its existing vehicles into robotaxis with a software update by the end of the following year.

With its EV sales sliding, Tesla’s ability to keep investors enthused may hinge on whether it can scale a driverless, ride-hailing service in the U.S. this year and upgrade the partially automated driving systems in its cars to a fully automated driving system. Today, its premium system is marketed as FSD (Supervised), and the company plans to sell an FSD Unsupervised system in the future.

Surveys by the Electric Vehicle Intelligence Report found a majority of U.S. consumers polled late last year did not want to ride in robotaxis, with particular concerns around safety.

Deutsche Bank analysts wrote in a note this week that they anticipated “muted underlying volume growth” for Tesla and EV maker Rivian this year with “autonomy and physical AI driving the narrative.” They also said, “Tesla will have to prove out FSD unsupervised and the scaling up of robotaxi (which in our view has been clearly tracking behind schedule) before garnering incremental valuation credit.”

Tesla didn’t respond to a request for comment on Thursday.

Late last year, California regulators found that Tesla had engaged in deceptive marketing and false advertising around their vehicles’ driverless capabilities. And the National Highway Traffic Safety Administration is currently investigating Tesla to determine how often the company’s FSD systems may have caused traffic safety violations.

According to TeslaDeaths.com, which draws on NHTSA data, legal filings and press reports to track fatal Tesla collisions, 65 people have died in Tesla crashes that involved the use of Autopilot, including two in which the company’s FSD systems were engaged in the seconds leading up to the crash.

Tesla is scheduled to report fourth-quarter results on Wednesday.

WATCH: Tesla takes Full Self-Driving feature to a monthly subscription