Even after adding President Donald Trump to his list of Tesla (TSLA) customers, Elon Musk is facing a turbulent month. Tesla stock has declined considerably in recent weeks, sparking investor concern, potentially due to Musk’s reduced presence at the automaker’s manufacturing facilities. Further complicating matters, Tesla’s sales in Europe have been steadily decreasing, fueled by growing negative sentiment towards Musk.
Meanwhile, one of Musk’s other companies isn’t faring well either. SpaceX has suffered two rocket explosions during test flights already this year, causing issues both in the air and on the ground. Falling debris has caused flight delays. However, a fresh development might be even more concerning for Musk. His ventures are becoming increasingly competitive, and now, one of his rivals has gained a powerful new leader.
Eric Schmidt, the former CEO of Google, is taking on a new challenge that could threaten Elon Musk’s plans.
The electric vehicle (EV) market isn’t the only industry where Musk is likely worried about increasing competition. Space exploration is also a rapidly expanding market — and things haven’t been going Musk’s way lately. To add to the mix, the race to colonize the moon has a formidable new contender. Eric Schmidt, the former longtime CEO of Google (GOOGL), is now leading Relativity Space.
Founded in 2016, the space exploration and technology startup is headquartered in Long Beach, California, much like its competitor, Rocket Lab USA (RKLB). However, unlike Rocket Lab, Relativity Space now has a new leader who seems highly focused on driving its growth. On Monday, March 10, Schmidt informed the startup’s staff that he had acquired a controlling stake in the company and would be taking over as CEO.
The specific amount Schmidt has invested in Relativity Space is undisclosed. However, Schmidt’s track record speaks for itself. He was the CEO of Google from 2001 to 2011, playing a huge role in turning it into the tech giant it is now. It is expected that Schmidt can do the same with Relativity Space since he joins the company at a critical time.
Outgoing CEO and co-founder Tim Ellis posted on X, stating, “I know there’s no one more tenacious or passionate to propel this dream forward,” referring to Schmidt assuming control of the company. As Schmidt prepares to lead the company into a new era, Relativity Space is preparing to build the initial “flight version” of its Terran R rocket, which could signal a turning point for the company.
“It is not immediately clear why Schmidt is taking a hands-on approach at Relativity,” reports Ars Technica. “However, it is one of the few US-based companies with a credible path toward developing a medium-lift rocket that could potentially challenge the dominance of SpaceX and its Falcon 9 rocket. If the Terran R booster becomes commercially successful, it could play a big role in launching megaconstellations.”
While Schmidt has made prior investments in the aerospace industry, this marks the first time he has taken a controlling stake and assumed a leadership position. Per reports, Schmidt has offered substantial financial backing for Relativity Space over the past year. The company’s funding has been dwindling. Although it initially raised $2 billion at an estimated $4-$6 billion valuation from investors such as Mark Cuban, BlackRock BLK, and Fidelity, the company has had to deviate from its original rocket-building strategy.
“The start-up has moved away from focusing entirely on 3-D printed materials and has begun incorporating more traditionally made parts in building its rockets,” The New York Times reports. The outlet also notes that Schmidt has expressed strong passion for the company’s projects as he prepares to oversee daily operations. With the aim of scaling operations and “improving product and manufacturing execution.” He likely hopes to help its progress toward new rocket launches.
Relativity Space is still relatively new in its industry, but the company has ambitious goals, including ultimately reaching a flight rate of 50-100 rockets per year. That may be some time away, but Elon Musk is likely keeping a close eye on it. If the company can successfully launch the Terran R this year, it will not bode well for SpaceX.
