Elon Musk’s aerospace company SpaceX is seeking to integrate its Starlink satellite terminals in the U.S. FAA’s (Federal Aviation Administration) national airspace network. The news was first reported by Bloomberg, citing people familiar with the matter. Starlink’s low orbit satellite terminals could help to fasten the upgrade of the IT infrastructure that supports that FAA’s aviation network.
Interestingly, Verizon Communications (VZ) was handed a $2 billion contract in 2023 to maintain and upgrade the FAA’s IT systems. Musk’s push into the FAA could hamper Verizon’s existing contract. Musk also commented on social media platform X that Verizon’s system is not functioning well and putting air travelers at serious risk.
SpaceX’s Entry in the FAA Raises Conflict of Interest
SpaceX’s rocket launches are regulated by the FAA. Hence, deploying Starlink’s internet terminals in the FAA’s national airspace system raises serious conflict of interest. Notably, Musk has already approved a shipment of 4,000 Starlink terminals to the FAA last week, under the program dubbed TDM X.
One terminal has been installed for testing at the FAA’s air-traffic control technology lab in Atlantic City, New Jersey. Meanwhile, two terminals are installed at non-safety critical sites in Alaska. TDM X is expected to be fully functional within the next 12 to 18 months.
The FAA’s air traffic control system performs a massive task of overseeing 45,000 flights carrying almost 3 million people in the U.S. daily. The airspace network’s age-old IT infrastructure has raised an alarm on the safety of air travelers, after the mid-air collision of a military helicopter and a regional jet in January. President Donald Trump has also called the system “obsolete.”
Musk’s Growing Government Links
Musk’s entry into the FAA through the SpaceX contract deepens his ties with various government bodies. Musk is leading DOGE (Department of Government Efficiency), aimed at saving $2 trillion in federal expenses. His recent steps to streamline overstaffed federal offices has drawn severe public backlash. Musk’s SpaceX also received a Pentagon contract in December 2024, to expand Ukraine’s access to a more secure satellite network. All these distractions are deteriorating Musk’s brand value and also impacting the stock price and performance of his EV (electric vehicle) company Tesla (TSLA).
What Is the Tesla Forecast for 2025?
Analysts prefer to remain on the sidelines on Tesla stock owing to the concerns mentioned above. On TipRanks, TSLA stock has a Hold consensus rating based on 13 Buys, 12 Holds, and ten Sell ratings. Also, the average Tesla price forecast of $351.38 implies 6.3% upside potential from current levels. In the past year, Tesla stock price has gained 65.8%.
