Elon Musk, the renowned entrepreneur and the world’s richest individual, is witnessing a steep financial setback as Tesla, his flagship electric car company, takes a hit. The past few months have been challenging for Tesla, with its market cap falling below the elusive trillion-dollar mark, and Musk’s net worth shrinking by over $100 billion since mid-December.
On a recent Tuesday (February 25), Tesla shares tumbled by another 8%, closing at $302.80. This decline caps a 25% drop in the company’s stock value this year alone. The downturn in Tesla’s fortunes stems from significant challenges, including a 45% drop in vehicle registrations across Europe in January, compared to the previous year, despite a rise in overall electric vehicle (EV) sales across the continent. In China, Tesla’s largest market outside the US, sales are also reportedly slowing down.
Some speculate that European consumers may be distancing themselves from Tesla, partly due to Musk’s prominent role in the Trump administration, which has been affecting the US-Europe diplomatic relationship. Meanwhile, long-time Tesla investors are re-evaluating their positions after a year of remarkable gains, with Tesla’s stock still up by 52% over the past 12 months. Gary Black, managing partner at The Future Fund, suggests the stock could decline further unless the company improves its trajectory for 2025 vehicle deliveries.
Andrew Harnik / Staff / Getty
Despite these headwinds, Musk’s influence spans various industries, steering ventures like SpaceX, X (previously Twitter), Neuralink, and the AI company xAI. His multifaceted leadership, although occasionally controversial, has been credited with driving Tesla’s growth. Investors have largely supported Musk’s diverse commitments, entrusting him to balance multiple ambitious projects.
However, not every initiative has received a warm welcome. The recent showcase of Tesla’s robotaxi, anticipated as a groundbreaking reveal, fell short of investor expectations, resulting in a 15% dip in Tesla’s stock. Adding to the tension, Tesla faces legal challenges from the production company behind the film “Blade Runner 2049,” pertaining to the robotaxi design.
In spite of these obstacles, Elon Musk remains undeterred. He continues to push the envelope with new Tesla models, aligning with evolving consumer demands and advancing the development of the company’s full self-driving technology, particularly within the Chinese market. “Tesla’s superior products, the introduction of a more affordable vehicle, and the promise of unsupervised autonomy will drive sales,” Black noted on X, emphasizing optimism amidst the turmoil.
The I, Robot event in October left many investors unimpressed / Sjoerd van der Wal / Contributor / Getty
Currently, Musk’s net worth stands at $379.9 billion, maintaining a significant $144 billion lead over Mark Zuckerberg, Meta’s CEO, who is the second-richest person globally. With ongoing innovations and market expansions, Musk and Tesla aim to reshape the landscape of electric vehicles, despite present challenges.
