Elon Musk’s net worth has dropped $5.4 billion this year, mostly due to trouble at Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction). His total is now $427 billion, which puts him miles ahead of Jeff Bezos, who has a net worth of $237 billion, according to the Bloomberg Billionaire Index.
What Happened to Tesla?
The EV leader faces some challenges.
Tesla stock has stumbled over the past several days. That has knocked the electric vehicle (EV) car leader down 2% this year, against a 1% gain in the S&P 500. Sales of its Model X and Model S decreased last year in the United States. It may be that sales of its new Cybertruck eroded the demand for those.
The new administration may also eliminate the $7,500 tax credit the federal government offers on some EVs. Most Tesla vehicles qualify for the discount.
Another issue, which is much less hard to quantify, is whether Musk’s relationship with the Trump administration will put off possible customers who are liberals. However, that is a theory that is almost impossible to prove.
There are a number of reasons Musk’s net worth is so much higher than anyone else in the world.
The recent net worth slip is likely due to the market cap of Tesla. However, over the past year, it is still up 81%. Its market cap sits at $1.27 trillion. Musk owns 20.5% of the company.
Tesla’s recently released numbers for 2024 reflect waning demand for EVs in the United States. Deliveries worldwide declined by just over 1.1% to 1.8 million. A similar problem is happening at Ford, GM, and most other large legacy car companies too. Americans still worry about the number of charging stations, charging time, and high prices for new EVs. Tesla continues to do well in China, which is the world’s largest EV market in the world by far. However, it has stiff competition there as well.
Looking forward, Tesla’s market cap (and Musk’s wealth) continues to ride on the fact that many investors view the company as an artificial intelligence (AI) play. Tesla’s self-driving function has improved over the years. Musk says that his vehicles will soon become completely autonomous and will not need drivers at all.
Other Musk Companies
Tesla and SpaceX and xAI and more.
Another contributor to Musk’s net worth is the most successful rocket maker in the world. SpaceX virtually controls the U.S. rocket business and is the leader in the industry worldwide. It has established itself as the preeminent rocket launch provider, lofting satellites, cargo, and people to space for NASA, the Pentagon, and commercial partners. It is building out a large network of Starlink satellites providing internet service.
Musk owns 42% of SpaceX and has 79% of the company’s voting shares. He can make decisions about SpaceX without challenge. SpaceX was recently valued at $350 billion.
Among Musk’s other holdings, the most valuable may eventually be xAI, a major rival to OpenAI in the race to control the future of AI. xAI recently raised $6 billion, which puts its value at between $40 billion and $50 billion. Musk owns over half of xAI. The valuation of OpenAI recently hit $157 billion.
Musk owns parts of several other companies, including social media platform X and implantable brain-computer interface operation Neuralink.
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