Elon Musk’s net worth has fallen below $400 billion for the first time in two months. This decline is mainly due to a 27% drop in Tesla’s stock price. Tesla shares had reached an all-time high in mid-December, partly due to expectations that Musk’s ties to US President Donald Trump would benefit the company.
Tesla’s Struggles and Recent Decline
Tesla’s stock has been hit hard recently. Last week was the automaker’s worst since October, with shares falling 11% after disappointing sales figures. In particular, deliveries in Germany plummeted by 59%, while sales in China dropped by 11.5%, mainly due to growing competition from BYD Co. Additionally, Tesla shares slid 3% on Monday, continuing a four-day streak of losses.
Musk’s Shift Toward Politics
Musk’s shift toward politics played a role in Tesla’s stock rise after Trump’s election. Since then, Musk has focused much of his attention on Washington. He has worked on reducing the federal budget, including slashing the USAID budget and investigating Treasury Department data. Moreover, Musk proposed cutting the federal workforce by offering pay for resignations.
Investor Expectations and Reality
Investors had hoped that the Trump administration would boost Tesla, especially with changes to electric vehicle subsidies and clearer self-driving regulations. However, those changes have yet to materialize. As a result, investors’ hopes for Tesla’s future have been tempered.
The True Value of Tesla
Musk has consistently referred to full self-driving autonomy as “the true value” of Tesla. However, analysts at Robert W. Baird, Ben Kallo and Davis Sunderland, have grown less optimistic about Tesla’s robotaxi business. They pointed out that Tesla removed its volume guidance after the fourth-quarter earnings report, signaling a shift in the company’s strategy.
Diversification of Musk’s Wealth
Despite the drop in Tesla’s stock, Musk’s fortune still heavily relies on his Tesla stake. However, his other ventures, like SpaceX and xAI, are now contributing more to his wealth. Musk’s 42% stake in SpaceX is worth around $136 billion, matching the value of his Tesla shares.
Musk’s Unsolicited Bid for OpenAI
In addition, Musk is leading a group of investors who made an unsolicited offer to buy OpenAI, the company behind ChatGPT, for nearly $95 billion. However, OpenAI CEO Sam Altman rejected the offer in a post on Musk’s social media platform, X.
