While Elon Musk is certainly not in any danger of struggling to make ends meet, his wealth has taken a major hit over the past few months.
Just recently, for example, Musk lost $29 billion US in a single day after shares of Tesla, his electric vehicle manufacturer, tumbled by 15 per cent on Monday, the worst day of the stock price since a 21 per cent loss in September 2020.
The company’s market value on the stock market has dropped 45 per cent since it hit an all time high of $1.5 trillion on Dec. 17, 2024. And as of March 11, according to the Bloomberg Billionaires Index, that has meant $126 billion being shaved off Musk’s own personal wealth since the beginning of this year, not an insignificant amount despite his massive financial holdings.
Some analysts say it’s an indication that Musk’s controversial comments, his connection to U.S. President Donald Trump, along with his new, time-consuming role of U.S. federal bureaucracy slasher, could be having a significant impact on his personal riches.
‘White-knuckle period’
“Tesla selling off like this does have an impact. That is the heart and lungs of the Musk ecosystem,” Wedbush Securities financial analyst Dan Ives told CBC News in an interview.
“Does it impact Musk on a day-to-day basis? No. Does it send a signal to Musk, the [Tesla] Board? Yes.”
That signal, Ives suggests, is that Musk, who owns around 13 per cent of Tesla, needs to refocus on his role as Tesla CEO.
“It’s definitely a white knuckle period,” he said. “It’s a moment of truth for Musk.”
The growing opposition to Elon Musk’s politics and his role in the U.S. government has Tesla owners caught in the middle, with some saying they’re embarrassed to be seen supporting a Musk brand.
Analysts say Tesla’s drop in share price can be attributed, at least partially, to the increased competition it has faced from rival electric vehicles, particularly out of China. Sales took a 12 per cent hit in California, its biggest market, and have been down considerably in Europe. In Germany, for example, sales declined by 76 per cent for the month of February.
Last year, Tesla recorded an overall sales decline by one per cent, the first decline in more than a decade.
Some of that decline can be attributed to operational challenges — the anticipation of new models and a refresh of the Tesla Model Y, along with inventory management — Financial Monthly reported this month.
Ives added that lukewarm demand for EVs has also been an issue.
But Anthony Sassine, a senior investment strategist at the New York-based investment managing firm Kraneshares, told CNBC in a recent interview that he believed Tesla’s shares were falling because of a “series of misguided strategic initiatives” by Musk.
Those included a focus on the Cybertruck rather than on other, cheaper Tesla cars, as well as what he said was “Musk’s involvement in politics and the backlash from investors and buyers in the U.S. and Europe.”
A report last month by brand valuation consultancy Brand Finance found that Tesla’s brand value had fallen by 26 per cent, due to “missed revenue expectations, increased competition in the EV sector, and price cuts across key markets, particularly in China.”
Musk under fire
However, its scores also fell on measures including reputation and recommendation.
Musk has attracted controversy for his comments on X, the social media platform he owns that was formerly known as Twitter, along with his support of Trump and far-right candidates around the world. Meanwhile, he has faced backlash for his role in the Trump administration’s slash-and-burn government downsizing efforts, known as the Department of Government Efficiency, or DOGE.
Tesla vehicle boycotts, protesters showing up at U.S. showrooms and even the vandalization of Teslas on the street are proof that Musk’s company has become a symbol of Trump and DOGE, which is ultimately hurting it, Ives said.
“Tesla is synonymous with Musk. Musk is synonymous with Tesla. And the brand erosion is a concern,” he said.
A lot of Tesla’s core customers tend to be Democrats on both coasts, Ives said, so “the last thing you want is Tesla associated with Donald Trump, MAGA.”
That might prove difficult after Trump sat in the driver’s seat of a red Model S Tesla vehicle Tuesday, with Musk riding shotgun as the vehicle sat on the White House driveway. This took place after the president posted on his own social media platform the night before that he would buy a new Tesla.
“Elon Musk is ‘putting it on the line’ in order to help our Nation, and he is doing a FANTASTIC JOB!” Trump wrote in a post on Truth Social. “I’m going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American.”
Instead of focusing on Tesla’s innovation and growth, Musk has become a polarizing figure, alienating key international markets where political sentiment plays a major role in consumer perception and decisions, Abigail Wright, a consultant at the business advisory firm Chamber of Commerce, told Newsweek.
“Had he channeled his energy into space exploration and technological advancements instead of politics, we might already be seeing breakthroughs that benefit humanity instead of stock declines and brand damage,” she said.
Musk still richer than Bezos
But it’s not all bad news for Musk, who also owns the rocket manufacturer Space X. He still retains the title of richest person in the world, with a total net worth of $307 billion, according to the Bloomberg Billionaires Index.
Amazon founder Jeff Bezos comes in second with a net worth of $218 billion.
U.S. federal workers were ordered to justify their jobs this weekend by submitting five bullet points on their accomplishments from the past week or face termination. The initiative, spearheaded by Elon Musk and his Department of Government Efficiency (DOGE) team, has Republican backing, Democratic opposition and warnings of legal challenges ahead.
Despite the stock price drop, Tesla’s market value on the stock market is currently over $700 million US, which still makes it the word’s most valuable automaker. It tops the next nine most-valuable major automakers combined, which collectively sold about 44 million cars last year, compared to Tesla’s 1.8 million.
As well, the Tesla Model Y was the top-selling vehicle for 2024.
In a recent interview with Fox Business, Musk acknowledged he was running his businesses “with great difficulty.”
But Ives says that in order to contain the damage, Musk needs to get more involved in the company, that he needs to appear at a Tesla factory or showroom and not just be at the White House or at Mar-a-Lago.
“He has to show that he is the pilot on the plane and not asleep at the wheel.”
