Elon Musk’s net worth has risen $16 billion this year to $449 billion, according to the Bloomberg Billionaire Index. That is miles ahead of Jeff Bezos, founder of Amazon.com Inc. (NASDAQ: AMZN) at $245 billion. Bloomberg describes him thus: “Musk is the chief executive of Tesla, the world’s most valuable carmaker.” However, his wealth is due to factors well beyond that.
24/7 Wall St. Key Points:
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Elon Musk’s net worth has risen $16 billion this year, making him the richest man in the world.
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Most of this increase is due to what is happening with Tesla.
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Tesla Inc.’s (NASDAQ: TSLA) market cap is $1.37 trillion. By contrast, the General Motors Co. (NYSE: GM) figure is $56 billion and Ford Motor Co.’s (NYSE: F) is $40 billion. In the past five years, Tesla’s stock is up 1,153%. Ford’s is up 11%, while GM’s is 43% higher.
What’s Up With Tesla?
Tesla’s stock is up 6% this year while the S&P 500 is 3% higher. Tesla’s global sales dropped 1% last year to 1.8 million. However, it gained ground in China, the world’s largest electric vehicle (EV) market.
One challenge Tesla has in the U.S. market is that the Trump administration may end a $7,500 EV tax credit. Most Tesla models qualify for some or all of that credit. If the price of Teslas and other EVs rises as the credit disappears, there is worry that what are already troubled EV sales in the United States could get worse.
While there is no proof, some observers believe that Tesla can weather the EV credit storm better than its competitors because its cars make money, while legacy car company EVs do not. The loss of the credit would further damage the companies that want to grab this market share.
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 theory is almost impossible to prove.
In greater detail about unit sales, 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
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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