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The Texas flag flies outside TDECU Stadium in Houston, Oct. 21, 2023.

Tim Warner | Getty Images Sport | Getty Images

Tesla’s long-awaited entry into the robotaxi market — expected later this month — is coming to Austin, Texas, which has emerged as a key battleground for self-driving technology.

CEO Elon Musk wrote in a post on X last week that the company has been testing Model Y vehicles with no safety drivers on board in the Texas capital for several days.

Tesla’s Austin robotaxi service will kick off with 10 vehicles and expand to thousands, moving into more cities if the launch goes well, Musk said in a May 20 interview with CNBC’s David Faber. 

But while the market remains nascent, Tesla already faces a hefty amount of competition.

The electric vehicle maker is one of several companies using Austin as a testing ground and debut market for self-driving technology. They’re all taking advantage of Austin’s robotics and AI talent, tech-savvy residents, affordable housing relative to other technology hubs and a city layout with horizontal traffic lights and wide roads that makes it particularly conducive to mapping software.

But the biggest reason they love Texas may be the state’s robotaxi-friendly regulation.

Volkswagen Group of America starting its first autonomous vehicle test program in Austin in July 2023.

Courtesy: Vokswagen AG

Already in Austin are Alphabet’s Waymo, Amazon’s Zoox, Volkswagen subsidiary ADMT, and startup Avride.

Waymo began offering robotaxi rides in Austin with Uber in March. Zoox started testing there last year, while ADMT has been testing Volkswagen’s electric ID vehicles in the city since 2023. Avride is headquartered in Austin and is testing its autonomous vehicles and delivery robots in the Texas capital. Avride said it plans to begin offering paid robotaxi rides in the city later this year. 

“The winners of the space are emerging, and it’s just a matter of scaling,” said Toby Snuggs, ​​head of sales and partnerships at Avride.

According to Uber, its Austin launch with Waymo has proved successful thus far. Uber CEO Dara Khosrowshahi told investors in May that riders are choosing the robotaxis over regular cars, and the company is preparing to scale its Austin autonomous fleet to hundreds of vehicles in the coming months, ahead of a robotaxi expansion into Atlanta later this year. 

“These approximately 100 vehicles are now busier than over 99% of all drivers in Austin in terms of completed trips per day,” Khosrowshahi told investors in May. 

Avride, which spun out of former parent company Yandex last year, has delivery robots in a fleet of about a dozen Hyundai Ioniq 5 vehicles in downtown Austin. The company said it plans to expand its Austin fleet to 100 vehicles later this year and aims to begin offering robotaxi rides in Dallas with Uber in 2025.

Tesla primarily relies on camera-based systems and computer vision to navigate its vehicles rather than the Waymo model of using sophisticated sensors such as lidar and radar. Tesla’s “generalized” approach to robotaxis is more ambitious and less expensive than Waymo’s, Musk said during Tesla’s first-quarter earnings call with investors in April. Musk has been promising Tesla investors that a self-driving car is on the way for roughly a decade and has repeatedly missed self-imposed deadlines.

“There’s probably a lot of ways it can be done, but we’re the only ones that have done it,” Waymo co-CEO Tekedra Mawakana told CNBC’s Deirdre Bosa in May. “We’ve been doing it 24 hours a day for almost five years. And so to us, it’s really important to focus on safety … and then cost — not cost and then safety.”

“You have to be able to see at night, you have to be able to have this vision that’s better than humans,” Mawakana said.

‘Friendly’ regulation

In addition to Austin, Phoenix is an AV hub for companies such as Waymo, which has been testing in the region since 2016. Waymo and the auto manufacturer Magna International announced in May that they plan to double robotaxi production at their new plant in the Phoenix suburb of Mesa by the end of 2026.

The San Francisco Bay Area, where Google began working on its self-driving car project in 2009, also has a large fleet of Waymo vehicles. Waymo opened its paid ride-hailing service to all local users almost a year ago, and said earlier this year that it’s expanding its service to include another 27 square miles of coverage in the region. Zoox is also testing in San Francisco.

While Tesla was started in the Bay Area, Musk moved its corporate headquarters to Austin in late 2021. In California, regulators at individual municipalities closely control where and how companies can operate autonomous vehicles. Texas has more relaxed regulations that benefit AV companies. 

When Waymo decided on Austin, it “looked at the operational structure and how friendly the regulatory environment is,” said Shweta Shrivastava, Waymo’s senior product and strategy executive. “It’s a tech-forward city — there’s a lot of openness in terms of welcoming and adopting new technologies, so that’s been great.”

Tesla CEO Elon Musk speaks at the Tesla Giga Texas manufacturing “Cyber Rodeo” grand opening party in Austin, Texas, on April 7, 2022.

Suzanne Cordeiro | AFP | Getty Images

Part of that friendliness is a 2017 Texas law that prohibited municipalities from regulating autonomous vehicles, giving the state full authority.

“It’s not like California, where you have certain regulations in LA, separate regulations in San Francisco, and municipalities between,” said Yulia Shveyko, Avride’s head of communications. “In Texas, it’s the same all across the state, and this is one of the great things about being here as an operator.”

The state is responsible for establishing the framework for autonomous vehicle operation, which includes that AVs must adhere to the same regulations as traditional vehicles, including registration, insurance and compliance with traffic laws. Texas law also requires AVs to have data recording systems to document potential accidents and incidents. 

The Texas Department of Transportation’s “role is to work with autonomous vehicle (AV) companies on what is needed to ensure the state’s infrastructure is prepared for the safe and efficient rollout of AVs,” a spokesperson said in an emailed statement.

Texas law allows for AV testing and operations on Texas roadways, “as long as they meet the same safety and insurance requirements as every other vehicle on the road.” 

Companies are choosing to test their AVs in Austin because of its “lower barriers both in terms of regulation and the acceptance by consumers in the area,” said Wassym Bensaid, chief software officer at EV maker Rivian

“This is really what makes Austin and San Francisco more open to this technology,” Bensaid added. Rivian in March rolled out a “hands-free version” of its driver-assistance system for highway driving, and the company plans to have an “eyes-off-hands-off” system available by the end of next year, Bensaid said.

A drone view shows the Tesla gigafactory in Austin, Texas, U.S., May 2, 2025.

Eli Hartman | Reuters

Texas’ transportation department created an AV task force in 2019. Formal meetings take place two to four times per year. Members of the task force include representatives from other agencies in the state and public entities as well as key industry stakeholders, its website says.

Waymo is an active member of the task force, the company confirmed.

The state’s transportation department didn’t respond to CNBC’s requests for further information about the task force.

Waymo has built goodwill with Austin officials by engaging with Texas stakeholders since it began testing in the city in 2015, the company told CNBC. 

Known then as Google’s self-driving car project, the company started driving on Austin streets a decade ago with safety drivers on board. 

Waymo closed Austin operations in 2019 to focus on its testing efforts in Phoenix, the spokesperson said, adding that it returned in March 2023, when the company’s technology was “more mature.”

Long before Waymo began testing in Austin, University of Texas at Austin’s Peter Stone entered his team’s vehicle in the Defense Advanced Research Projects Agency Urban Challenge in 2007. Stone is the director of the Learning Agents Research Group at UT, and his team’s entry was called Austin Robot Technology — one of the first deployments of a partially automated driving system on the streets of Austin.

Stone has been at the university for 23 years and has taught several students who are now employees at Waymo and other car companies, he said. Advancements in machine learning and years of testing have contributed to companies such as Waymo being able to navigate roads better than some human drivers, he said.

Lone Star influence

U.S. Transportation Secretary Sean Duffy speaks during a news conference on May 20, 2025 in Austin, Texas.

Brandon Bell | Getty Images

As president, Trump and his transportation secretary, Sean Duffy, have both been supportive of federal-level standards, Waymo’s Mawakana told CNBC in May, adding that she’s “optimistic” it will be arranged sometime during this presidential term. Waymo supports proposed federal frameworks for national safety standards and has voiced that support to the Trump administration, a company spokesperson said.

“Now’s the time,” Mawakana said, pointing to places such as China, which invests in AV supply chains and grants and has federal AV rules. “We should be in the exact same position.”

‘Changing environments’

The concentration of regulatory power, however, comes with some concern that cities will be mostly powerless should issues arise, experts said. 

A state senate transportation hearing in September addressed the lack of regulation in Texas for driverless vehicles.

“To many of our first responders communities, this is new territory for them,” Democratic Texas state Sen. Sarah Eckhardt reportedly said at the hearing. “I mean pulling over an autonomous vehicle, you know, what do you do? An autonomous vehicle in an accident, what do you do?” 

In one example, Houston city officials reportedly faced delays in enforcement instructions from state regulators after Cruise cars caused a backup on the city’s Montrose Boulevard in 2023.

Texas has at least 17 companies that have deployed or tested on roads, said Nick Steingart, director of state affairs at Alliance for Automotive Innovation, at the state hearing. 

“As the technology matured and evolved, we fully expected that the laws would evolve as well,” Steingart said. 

The state is considering legislation that may provide some clarity, according to Austin’s transportation department.

Several AV companies in Austin have safety protocols and proactively work with local first responders. Zoox, for example, has held trainings with first responders and met with city officials, a spokesperson said. But there is technically no requirement for AV companies to engage with emergency services, Austin officials confirmed.

Companies hoping to succeed in Texas often begin their conversations with the state by focusing on safety first, Austin’s Leff said. “They note their technology can recognize a fire vehicle or a hand signal, so there’s a lot of focus on things like that,” he said. 

Austin’s transportation department has been collecting information about incidents that pose a risk to public safety and relaying that data to the appropriate operators, the city said. It places “all reports we receive about AV incidents into our dashboard, about half of which over time have come from our city department colleagues,” city officials said.

Waymo launched its ride-hailing service in Austin, Texas, a hotspot for autonomous vehicle testing, in March.

Jennifer Elias | CNBC

Waymo, which has become one of the most visible leaders in the robotaxi market, has said it has made safety a priority. Mawakana and co-CEO Dmitri Dolgov told employees at a November all-hands meeting that they should scale up as aggressively as possible but do so with safety at the forefront of all their efforts, people familiar with the matter told CNBC. The people asked not to be named because they were not authorized to speak publicly.

Waymo tracks incidents involving its vehicles but doesn’t share city-level data publicly, a company spokesperson said.

With Texas regulation around AVs relatively lax, some AV makers worry what impact a collision by one of the players in the state could mean for the entire industry. 

“It takes a long time to earn trust, and it doesn’t take that long to lose it,” Mawakana said. “There can always be an overreaction by regulators — their job is to protect the public.”

Already, the AV industry has suffered a number of black eyes. General Motors shut down its Cruise robotaxi service in December after one of its vehicles dragged a woman 20 feet on a street in San Francisco in 2023. Uber also pulled out of the self-driving space after one of its self-driving test vehicles struck and killed a woman in Arizona in 2018. 

In Austin, a woman posted a TikTok video in April showing a Waymo vehicle that she said had abruptly stopped underneath a highway with her and another passenger inside. After other cars began honking at them, they contacted customer support for help but were told the Waymo couldn’t be moved. The woman said the car locked the passengers inside until they threatened to go live on TikTok.

“Now we’re walking,” the woman says in the video, “and our Waymo is still there. This is insane.”

Riders “always have the ability to pause their ride and exit the vehicle when desired by pulling the handle twice — once to unlock and another to open the door,” a Waymo spokesperson said in response to the video. 

Despite such incidents, UT’s Stone said he thinks cities are being overly cautious.

“The standard people are aiming for is perfection, and the standard they should be aiming for is better than people,” he said. “A fatal car accident rarely makes the local news, but if autonomous cars reduce that number, it should be seen as a huge societal win.”

— CNBC’s Lora Kolodny and Deirdre Bosa contributed to this report.

WATCH: Waymo co-CEO on 10 million driverless rides and Tesla’s coming robotaxi challenge

Waymo co-CEO on 10 million driverless rides and Tesla’s coming robotaxi challenge

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Nvidia insiders dump more than $1 billion in stock, according to report

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Nvidia insiders dump more than  billion in stock, according to report

NVIDIA founder and CEO Jensen Huang speaks during the NVIDIA GTC Paris keynote, part of the 9th edition of the VivaTech technology startup and innovation fair, held at the Dôme de Paris in the Porte de Versailles exhibition center in Paris on June 11, 2025.

Mustafa Yalcin | Anadolu | Getty Images

Insiders at artificial intelligence chipmaker Nvidia have dumped more than $1 billion in stock over the last year, according to a report from the Financial Times.

About $500 million worth of sales occurred over the last month as the market notched new highs and shook off geopolitical tensions that had rattled investors, according to the report. The stock is up more than 17% this year despite concerns over curbs limiting AI chip sales overseas and 44% over the last three months.

Securities filings revealed that the tech titan recently unloaded about $15 million worth of shares as part of his more than $900 million plan announced in March to sell up to 6 million shares through the end of the year. Huang’s net worth totals about $138 billion, placing him as 11th on the Bloomberg Billionaires Index.

Last week, the chipmaking giant hit a fresh record and rallied for five straight days following the stock sales and an annual shareholder meeting, where the CEO called robotics the biggest opportunity for the company after AI. That helped the chipmaker regain its seat as the most valuable company ahead Microsoft and Apple.

The FT article cited a report from VerityData, which noted that the jump in shares above $150 prompted the stock dump.

Last year, Huang unloaded more than $700 million in Nvidia shares as part of a prearranged plan.

A Nvidia spokesperson declined to comment on the report.

Read the complete Financial Times report here.

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Tesla’s IPO was 15 years ago. The stock is up almost 300-fold since then

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Tesla's IPO was 15 years ago. The stock is up almost 300-fold since then

CEO of Tesla Motors Elon Musk waves after ringing the opening bell at the NASDAQ market in celebration of his company’s initial public offering in New York June 29, 2010.

Brendan McDermid | Reuters

At the time of Tesla’s IPO 15 years ago, the company had generated roughly $150 million in revenue in its lifetime. That came almost entirely from the Roadster, a two-seat electric sportscar that boasted a range of 236 miles on a single charge.

The Model S sedan was still in the lab, two years away from hitting the market.

“The Model S, which is planned to compete in the premium vehicle market, is intended to have a significantly broader customer base than the Tesla Roadster,” the company said in its IPO filing, ahead of its planned $226 million offering.

A bet on Tesla, which debuted on the Nasdaq on June 29, 2010, was a wager on CEO Elon Musk’s ability to develop a roster of mass-market electric cars and scale an automaker far away from the Detroit auto hub, focusing instead on Silicon Valley, home to much of the world’s top tech talent.

Musk didn’t start Tesla, but he invested early, served as chairman and took over as CEO in October 2008, after leading a board revolt against founding CEO and inventor Martin Eberhard early that year.

An investor who put $10,000 into Tesla’s stock at the time of the company’s IPO and held onto all those shares would now own a stake worth close to $3 million. A similar investment at the time in the S&P 500 would have resulted in holdings worth about $57,000.

Far removed from its days as an experimental clean-tech startup led by a member of the “PayPal mafia,” Tesla is now the eighth most-valuable publicly traded U.S. company, with a market cap of over $1 trillion after nearly hitting $100 billion in revenue last year.

The Roadster is largely in the history books, and the Model S is no longer of great importance to the company’s bottom line. Rather, it’s Tesla’s top-selling Model Y SUV and Model 3 sedan, along with sales of environmental regulatory credits, that helped define the company’s financial success over the past decade.

We went to Texas for Tesla's robotaxi launch. Here's what we saw

But for the 54-year-old Musk (his birthday was Saturday), now the world’s wealthiest person, that’s the past. He’s told investors that the reason to buy and own Tesla stock from here has almost nothing to do with selling cars to consumers.

“If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company,” Musk said on an earnings call in April of last year. He added, “We will, and we are.”

Two months after that, Musk said his company’s Optimus humanoid robots that he hopes some day will perform like R2-D2 and C-3PO in Star Wars, could some day lift Tesla’s market cap to $25 trillion.

Musk, who last year characterized himself as “pathologically optimistic,” has said he expects thousands of Optimus robots to be working in Tesla factories by the end of 2025, and that the company will begin selling the robot next year.

As for autonomy, Tesla currently lags behind Alphabet’s Waymo, which is operating public robotaxi services in several U.S. markets, and Baidu’s Apollo Go in China. Tesla’s Robotaxi just launched a very limited pilot service in Austin, Texas, earlier this month, and said Friday it had completed its first driverless delivery of a new car to a customer.

While Tesla still has its share of fanatics and a largely bullish slate of analysts, Wall Street is skeptical of Musk’s futuristic promises or sees them as baked into the stock price. The stock is down about 20% this year, badly underperforming major U.S. indexes and trailing all of its megacap tech peers. Apple, down 19.7% for the year, is the only one close.

Earlier in June, Tesla’s vice president of Optimus robotics, Milan Kovac, said he’s leaving the company after a nine-year tenure, and Musk more recently fired Omead Afshar, the automaker’s vice president of manufacturing and operations.

Meanwhile, Tesla EV sales have been sluggish in 2025, with automotive revenue suffering a second straight year-over-year decline in the first quarter due to an aging lineup and bustling competition, especially from lower-cost Chinese manufacturers.

New Tesla sales in Europe fell for a fifth straight month in May, according to data from the European Automobile Manufacturers Association, or ACEA, and Tesla’s newest model, the Cybertruck, has failed to gain significant traction in the U.S. after a series of recalls.

Hovering over Tesla’s business is the unpredictability of Musk.

Long glorified for his business success — through PayPal, Tesla, SpaceX, brain tech startup Neuralink and artificial intelligence company xAI, among other pursuits — Musk asserted himself in the political realm last year, when he endorsed Donald Trump for president and subsequently injected nearly $300 million into his campaign and related Republican causes.

Tesla CEO Elon Musk holds a key gifted by U.S. President Donald Trump in the Oval Office of the White House on May 30, 2025 in Washington, DC.

Kevin Dietsch | Getty Images

Musk spent the first few months of 2025 spearheading President Trump’s Department of Government Efficiency (DOGE), slashing the size of the federal government and stripping resources from regulatory agencies, including those tasked with oversight of his companies.

But his pivot to politics came at a cost, at least in the short term.

Musk’s vocal and financial support of Trump, endorsement of Germany’s far-right AfD party and extended string of charged and divisive remarks and gestures, including on his social network X and in press appearances, has been correlated with declines in Tesla’s reputation, and a drop in his overall favorability, according to polling data.

“Unless Tesla can come up with a whole range of new products that will really excite consumers, and unless they can mitigate some of the antagonism caused by their leader, they will be seen as past their peak and will begin to go down,” David Haigh, CEO of research and consulting firm Brand Finance, said in January.

Brand Finance’s data showed that the value of Tesla’s brand fell by 26% in 2024, a second straight annual decline. That was before Musk’s time working in the second Trump administration.

Musk’s official tenure in Washington, D.C., ended earlier in June, just as his relationship with the president was souring. Shares of Tesla fell 14% on June 5, as President Trump threatened to pull government contracts for Musk‘s companies, escalating a war of words over the president’s spending bill.

Musk temporarily slowed his posting about politics on social media after that, and appeared to focus more on promoting his businesses. But this weekend he resumed attacking portions of the bill that would hamper solar and renewable energy companies, including Tesla.

Whether Musk is now focused enough to solve Tesla’s problems and, even if he is, whether that’s a big catalyst for the company, is very much up in the air.

Musk and Tesla didn’t respond to a request for comment.

Tesla investors have learned that volatility is a big part of the story, and has been since the company’s stock market debut. On more than 40 occasions in the past 15 years, Tesla’s stock has gained or lost at least 20% in a single month.

Here are the three best and worst months for the stock and what happened to cause these hefty moves:

The good months

Elon Musk attends a discussion session during the Cannes Lions International Festival Of Creativity in Cannes, France, June 19, 2024.

Marc Piasecki | Getty Images

May 2013

In Tesla’s best month on record, the stock jumped 81%. The company for the first time reported a quarterly profit, albeit a very narrow one. It didn’t mark a sudden turn to profitability, as Tesla continued to lose money until 2018. But sales of Model S cars topped estimates as did revenue from zero emission vehicle (ZEV) credits, which have long been a boon for the company and have sometimes been the difference between a quarter ending in the red or the black.

August 2020

Following a big dip in the early days of the Covid pandemic, Tesla’s stock began an historic rally, leading to an eightfold increase in the stock in 2020, by far its best year on record. Its single best month that year was August, when the share price jumped 74%. Model 3 sales were accelerating rapidly, but much of the momentum was tied to buzz that the company could soon enter the S&P 500, and a pandemic market boom, when retail investors poured into meme stocks, cryptocurrencies and FOMO (fear of missing out) assets. Tesla’s big announcement in August 2020 was a five-for-one stock split, with the share price having soared well past $1,000. Tesla would split its stock again in 2022.

November 2010

Tesla’s 62% rally in its fifth full month as a public company was as much a sign of early volatility as anything else. The next month, the company would lose almost a quarter of its value, wiping out most of those gains. Tesla’s cash position at the end of 2010 was precarious enough that the company warned it may need to raise more money in the future, particularly “if there are delays in the launch of the Model S.” On Nov. 9, 2010, Tesla reported a 31% drop in year-over-year revenue to $31.2 million and a net loss of $35 million. A week earlier, the company said Panasonic had invested $30 million in Tesla through a private placement.

The bad months

Elon Musk, during a news conference with President Donald Trump on May 30, 2025 inside the Oval Office at the White House in Washington.

Tom Brenner | The Washington Post | Getty Images

December 2022

Tesla’s steepest monthly slump on record was a 37% decline to wrap up 2022, which was the worst year for the Nasdaq since the 2008 financial crisis. The company faced a production halt at its Shanghai facility, which was dealing with a fresh onslaught of Covid cases. Musk had been selling Tesla stock in big chunks to fund his $44 billion acquisition of Twitter, which he later renamed X.

Musk said on Twitter Spaces on Dec. 22 that he wouldn’t be selling any stock for 18 to 24 months. In a debate with a Tesla shareholder, he pinned Tesla’s declining share price on Federal Reserve rate hikes, writing that “people will increasingly move their money out of stocks into cash, thus causing stocks to drop.” The distraction of the Twitter deal weighed on Tesla shares, and Musk also frustrated some shareholders by borrowing personnel from the Tesla Autopilot team to work on his social media company’s technology.

February 2025

What was supposed to be a honeymoon period for Tesla, thanks to Trump’s return to the White House, turned into a massive selloff, with the stock plummeting 28% in February. In its earnings report in late January, Tesla said automotive revenue sank 8% from a year earlier and the company reported a 23% drop in operating income. Tesla cited reduced average selling prices across its Model 3, Model Y, Model S and Model X lines as a major reason for the decline. Investors also worried about impending tariffs on goods and materials coming from Canada and Mexico, where some of its key suppliers are based. With Musk ramping up his political rhetoric, new vehicle registrations dropped in Europe, plummeting in Germany by around 60% in January from a year earlier.

January 2024

The beginning of 2024 was almost as bad for Tesla, with the stock tumbling 25% to open the year. The company reported revenue and profit for the fourth quarter that trailed estimates, partly because of steep price cuts around the world. Tesla warned that volume growth in 2024 “may be notably lower” than in 2023, and cautioned investors that it was “currently between two major growth waves.”

Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at ACL Live on March 11, 2018 in Austin, Texas.

Diego Donamaria | Getty Images

There were countless other monumental moments for Tesla along the way and, had Musk gotten his wish in 2018, the IPO anniversary may have never taken place.

“Am considering taking Tesla private at $420. Funding secured,” Musk infamously tweeted in August of that year. Tesla’s stock trading was initially halted and shares were volatile for weeks. A take-private never occurred.

The SEC investigated and charged Musk with civil securities fraud as a result of the tweets. Tesla and Musk struck a revised settlement agreement in 2019 over those charges. The agreement forced Musk to temporarily relinquish his role as chairman of the Tesla board, a position that’s now held by Robyn Denholm.

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France is betting Eutelsat can become Europe’s answer to Starlink — but experts aren’t convinced

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France is betting Eutelsat can become Europe's answer to Starlink — but experts aren't convinced

France views Eutelsat as a strategic asset in the EU’s push for technological sovereignty.

Benoit Tessier | AFP via Getty Images

For years, France’s Eutelsat has been trying to build a European alternative to Elon Musk’s Starlink satellite broadband service.

The company merged with British satellite venture OneWeb in 2023, consolidating the region’s satellite communications industry in an effort to catch up to Starlink, which is owned by SpaceX.

Last week, the French state led a 1.35-billion-euro ($1.58 billion) investment in Eutelsat, making it the company’s biggest shareholder with a roughly 30% stake.

Europe largely lags behind the U.S. in the global space race. Starlink’s constellation of over 7,000 satellites dwarfs Eutelsat’s. Meanwhile, Europe’s launch capabilities are more limited than the U.S. The region still relies heavily on America for certain launch services, which is a market dominated by SpaceX.

Eutelsat currently has a market capitalization of 1.6 billion euros, much lower than estimates for Starlink owner SpaceX’s value, which was pegged at $350 billion in a secondary share sale last year. In 2020, analysts at Morgan Stanley said that they see Starlink growing to $80.9 billion in their “base case valuation” for the firm.

Luke Kehoe, industry analyst at network monitoring firm Ookla, said France’s investment in Eutelsat shows the country “is now treating Eutelsat less like a commercial telco and more like a dual-use critical-infrastructure provider” and a “strategic asset” in the European Union’s push for technological sovereignty.

However, building a European competitor to Starlink will be no mean feat.

A matter of scale

Communications industry experts tell CNBC that, while Eutelsat could boost Europe’s efforts to create a sovereign satellite internet provider, challenging its U.S. rival Starlink would require a significant increase in investments in Low Earth Orbit (LEO) satellites.

Eutelsat’s OneWeb arm operates a total of 650 LEO satellites, which is less than a tenth of Starlink’s 7,600-strong global satellite constellation.

“To offer greater capacity and coverage, [Eutelsat] needs to increase the number of satellites in space, a task made more difficult due to the fact that many of OneWeb’s satellites are nearing the end of their lifespan and will need to be first replaced before growing the constellation’s size,” Joe Gardiner, research analyst at market research firm CCS Insight, told CNBC via email.

Ookla’s Kehoe echoed this view. “Eutelsat’s chances of achieving parity with Starlink in the mass-market satellite broadband segment within the next five years remain limited, given SpaceX’s unmatched global scale in LEO infrastructure,” he said.

“Even with the latest injection of capital from the French state, Eutelsat continues to lag behind Starlink in several key areas, including capital, manufacturing throughput, launch access, spectrum and user terminals.”

Nevertheless, he thinks the company is “well positioned to succeed in European-sovereign, security-sensitive and enterprise segments that prioritise jurisdictional control and sovereignty over raw constellation capacity.” The enterprise segment refers to the market for corporate space clients.

Could Eutelsat replace Starlink in Europe?

That’s certainly the hope. France’s Emmanuel Macron has urged Europe to ramp up its investment in space, saying last week that “space has in some way become a gauge of international power.”

When Eutelsat announced its investment from France last week, the firm stressed its role as “the only European operator with a fully operational LEO network” as well as the “strategic role of the LEO constellation in France’s model for sovereign defense and space communications.”

Earlier this year, Eutelsat was rumoured to be in the running to replace Starlink in Ukraine. For years, Starlink has offered Ukraine’s military its satellite internet services to assist with the war effort amid Russia’s ongoing invasion.

Read more CNBC tech news

Relations between the U.S. and Ukraine soured following the election of President Donald Trump and reports surfaced that U.S. negotiators had raised the possibility of cutting Ukraine’s access to Starlink.

Germany set up 1,000 Eutelsat terminals in Ukraine in April with the aim of providing an alternative — rather than a replacement — for Starlink’s 50,000 terminals in the war-torn country.

Since then, U.S.-Ukraine tensions have somewhat cooled, and Starlink remains the primary satellite broadband provider to the Ukrainian military.

Eutelsat’s former CEO Eva Berneke has herself admitted that the company cannot yet match Starlink’s scale.

“If we were to take over the entire connectivity capacity for Ukraine and all the citizens — we wouldn’t be able to do that. Let’s just be very honest,” she said in an April interview with Politico.

Berneke was replaced as CEO in May by Jean-Francois-Fallacher, a former executive of French telecoms giant Orange.

Apples and oranges

Increased government investment needed to support European satellite sector, says Eutelsat CEO

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