Feb 11, 2025 - 03pm
Elon Musk’s Net Worth Plunges by $42 Billion Amid Tesla Stock Decline & Political Controversy
Headline
Tesla’s sharp stock decline in early 2025 has wiped out tens of billions from the fortune of Elon Musk, the world’s richest man and CEO of the electric vehicle giant. The downturn comes as Musk’s deep involvement in President Donald Trump’s administration raises concerns over its potential impact on Tesla’s business and global consumer sentiment.
Key Facts
Tesla’s stock plummeted 6.3% on Tuesday, closing at $328.50 per share, its lowest price since November 2024.
The slump was triggered by advances in autonomous driving technology from Chinese EV competitor BYD and a critical note from Oppenheimer analysts, warning that Musk’s political ties to Trump could alienate customers.
Oppenheimer’s report flagged “concerning” sales figures in China and Europe, echoing a Stifel analysts’ warning that Musk’s declining public perception could be a “headwind to sales.”
Tesla shares have dropped nearly 19% in February alone and are now 32% below their all-time high of $479.86, recorded in December 2024.
Musk, Tesla’s largest shareholder, owns approximately 13% of the company, plus an additional 9% in stock options, which are currently under legal review.
Forbes estimates Musk’s current net worth at $378.8 billion, marking a $42.8 billion loss from his $421.6 billion valuation at the end of January.
Despite the losses, Musk remains $130 billion wealthier than the second-richest person in the world, Meta CEO Mark Zuckerberg.
Big Number
$12.5 billion – the amount Musk’s fortune declined in a single day on Tuesday as Tesla stock took another major hit.
Crucial Quote
Oppenheimer analysts stated, “Musk’s political activity has fans in certain circles, but his public life risks alienating consumers and employees as the Trump administration tests the limits of its power.”
Key Background
Tesla accounts for the majority of Musk’s wealth, while his stakes in SpaceX, X (formerly Twitter), and xAI make up the remainder of his fortune.
Tesla’s post-election stock rally has slowed down, as fourth-quarter earnings missed Wall Street expectations, and sales in Europe and China declined.
Musk donated nearly $290 million to Trump and GOP causes during the 2024 election, securing a key advisory role in Trump’s administration.
One of Musk’s most controversial positions is leading the new DOGE agency, which aims to drastically cut back the federal government’s influence over business and technology.
Tangent
In a bold move, Musk submitted a $97.4 billion bid on Monday to acquire the nonprofit arm of OpenAI, a rival to his AI startup xAI, currently led by Sam Altman. Analysts called Musk’s offer “a distraction from Tesla’s challenges”, as competition in the AI sector heats up. Musk and Altman co-founded OpenAI in 2015, but parted ways in a high-profile dispute over the company’s direction.
What’s Next?
Analysts are watching Tesla’s upcoming earnings report to see if Musk’s political entanglements continue to impact stock value.
The future of Musk’s bid for OpenAI remains uncertain, with reports suggesting fierce resistance from the company’s leadership.
Tesla is set to face increasing competition from Chinese automakers, as BYD and other EV firms make major advancements in autonomous driving technology.