Elon Musk, the CEO of Tesla, has become the first person in history to erase $200 billion from their net worth. Musk had reached a net worth of $340 billion in November 2021, but a significant drop in Tesla’s shares has caused his fortune to plummet to $137 billion. This drop in net worth comes after Musk had become the second person to amass a personal fortune of more than $200 billion in January 2021, after Jeff Bezos. He remained the world’s richest person until this month when he was overtaken by Bernard Arnault, the French tycoon behind luxury-goods powerhouse LVMH.
Tesla’s dominance in the electric car industry, which was the foundation of its lofty valuation, is now being challenged by competitors catching up. In an effort to boost sales, Tesla has offered US consumers a rare $7500 discount on its two highest-volume models and reportedly reduced production at its Shanghai plant. Meanwhile, Musk has been preoccupied with Twitter, which he acquired for $44 billion in October 2021, and has applied a move-fast-and-break-things approach to its operations.
Musk has dismissed concerns about Tesla and has repeatedly taken to Twitter to criticise the US Federal Reserve for raising interest rates at the fastest pace in a generation. Despite concerns about Tesla, Musk has warned against the dangers of borrowed money in panicky markets and advised people to keep their powder dry.
The decline in Tesla shares has been so steep that they are no longer Musk’s biggest asset, according to Bloomberg’s wealth index. His stake in his closely held SpaceX, at $44.8 billion, now exceeds his approximately $44 billion position in Tesla stock, although he still has options worth an estimated $27.8 billion. Musk now owns 42.2% of SpaceX, according to a recent filing.
