By on January 8, 2021

Move aside, Jeff Bezos, as Elon Musk is now the world’s richest man. At least according to CNBC.

His net worth is now $185 billion, thanks to increases in Tesla’s share price.

Musk started last year with $27 billion and was barely in the top 50 of the world’s richest people. So, unlike most of us, Elon had a good 2020.

This is because Tesla’s share price has increased more than ninefold in that time. The company is now worth more than $760 billion.

While Musk also owns SpaceX and has plenty of other things going on in his career, Tesla is what’s providing all the cash right now.

Yes, Tesla – an automaker that only makes four vehicles, most aimed at luxury buyers – vehicles that have been plagued with reliability issues. An automaker that’s had all sorts of production problems.

Musk’s hype of the brand probably hasn’t hurt – despite his misleading statements about Tesla offering full autonomy – Tesla’s autonomous systems are NOT fully self-driving. He’s prone to controversial statements and has an army of stans ready to defend Tesla against any criticism (god help the poor journo who writes a poor review of a Tesla model or an article even mildly critical of the company).

Tesla doesn’t even need a PR team to get love from the stock market, I guess.

A generous pay package for Musk apparently put him over Bezos, as CNBC notes that Forbes still has Bezos ahead in the horserace.

Whatever man, says I, the auto journo, typing this on a dining-room table that his parents bought when he was in high school.

Brother Elon, can you spare $100K?

[Image: Elon Musk via Musk’s Twitter account]

 

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44 Comments on “Elon Musk Now World’s Richest Man...”


  • avatar
    28-Cars-Later

    “Musk started last year with $27 billion and was barely in the top 50 of the world’s richest people.”

    That is mind boggling.

    • 0 avatar
      PeriSoft

      Remember that most of the actually-rich people in the world aren’t on those lists, because they have actual money rather than theoretical money. The Forbes etc. lists are almost entirely (by necessity) made up of people who own lots of stock in public companies, and most of them are either legally or practically forbidden from turning more than a tiny percentage of that equity into actual cash.

      Granted, founders who own a big chunk of a big company are rich by any reasonable societal measure, but they’re not nearly as rich as the numbers suggest. Elon Musk might own a percentage of something that other people value a lot, but he can’t actually access much of that value without either incurring lots of risk (borrowing against its expected future value) or taking a massive haircut (selling tons of it and tanking the value of the shares themselves as a result). I don’t know how much stock Musk could actually sell without starting a vicious cycle and putting the whole pile at risk, but it’s probably under 10% of his “net worth”.

      My own position on the political spectrum notwithstanding, it really grinds my gears when other media outlets conflate rising stock value with salary (as in “Bezos earns X more than a regular person”). The net worth of Musk and Bezos is potential money, like the value of your house increasing. If some other people out there decide that my house is worth a billion dollars, I’m not suddenly rich, and I’m not “making money” until I sell it. The same goes for Musk and Bezos and a large chunk of that “top 50”, and doubly so because if they try to access liquidity that very action reduces their net worth.

      Anyway, that’s just a pet peeve of mine. Didn’t mean to hijack the thread. Rant complete! :p

      • 0 avatar
        SCE to AUX

        @PeriSoft: That’s an excellent explanation.

        I have a house and a 401k worth something – and three used cars – but maybe only $20 cash in my pocket.

        Odd side note: I paid for some little thing with cash in December, and realized that I was still carrying the same money I had in my wallet since March.

        Back to Mr Musk, I suspect you’re right – a massive sell of his stock (or some other large investor) could trigger a downward spiral of its value. Personally, I’d prefer to see the TSLA P/E fall via rising earnings rather than falling price. But in today’s weird market, rising earnings would certainly push the price only higher. I guess people are comfortable with a P/E of 1700 instead of 17.

        • 0 avatar
          FreedMike

          Exactly, and let’s add this: Amazon is a FAR bigger, more established company than Tesla. Plus, the world’s established carmakers are set to take a HUGE chunk out of Tesla. There are plenty of people who want EVs but don’t want to put up with Tesla’s weird styling and interior designs, or their less-than-stellar quality rep. Meanwhile, is anyone really in a position to take Amazon down? None that I can see.

          If I had to choose between Bezos’ paper wealth and Musk’s, I’d choose the former.

          • 0 avatar
            SCE to AUX

            They might take a chunk of Tesla’s market share, but not Tesla’s volume. I think the EV market will simply grow with the new entries.

            But really, only VW seems committed to the volume it takes to become profitable with EVs. Everybody else is just dabbling, and will therefore lose money.

            Tesla has built well over a million EVs already, so they are actually the ‘established’ carmaker as far as drivetrains go. They could do so much better elsewhere.

            But as you say, tolerating the quirks of Tesla is not for everyone, including me so far.

          • 0 avatar
            FreedMike

            I’d say it depends on the product. If the established automakers build great stuff that people want to buy, then Tesla is in trouble. If not, then I think what you’re saying might be the more likely outcome.

            Either way, though, I think this is the truth of the matter: Tesla is great at building EV tech and not great at building cars, and the opposite is true of the established automakers. And at the end of the day, those automakers have the resources and capability to learn and improve their stuff quickly. It’s a long game and I think the established automakers have the upper hand. Wouldn’t surprise me if Tesla got bought.

          • 0 avatar
            ToolGuy

            “Wouldn’t surprise me if Tesla got bought.”

            Interesting.
            https://tinyurl.com/ycgt6xdk

            How would this work, exactly? (Serious question)

          • 0 avatar
            ToolGuy

            “those automakers have the resources and capability to learn and improve their stuff quickly”

            Can you give some concrete examples of times when the legacy OEM’s ‘learned and improved their stuff quickly’ in the last 10 years? (I will think more about it, but I’m struggling right now.)

          • 0 avatar
            FreedMike

            I don’t think it’s that hard to come up with examples of established automakers being innovative in the last ten years. How about aluminum-bodied F150s, several credible EVs (Chevy Bolt, Porsche Taycan, VW ID4, etc), turbo-fours, variable-compression engines, and on and on.

            But what I was trying to allude to was their markedly superior manufacturing abilities. EV tech isn’t all that hard to master, but manufacturing is. And manufacturing is definitely Tesla’s Achilles heel. That’s the reason why they have the quality issues they have; for now, that’s not a deal killer since the product is so unique, but once you can buy something like a Model 3 from a company that doesn’t build cars in tents, that’s going to be a big problem for Tesla.

            As far as Tesla getting bought, it’d take a drop in their stock price, but I could see someone like Toyota or whatever FCA is calling itself these days buying them whole simply to absorb their EV tech, versus having to develop it on their own.

          • 0 avatar
            jmo

            “EV tech isn’t all that hard to master,”

            It most certainly is. That’s why the Taycan is so short on range. It’s both a chemistry and a software problems that VAG doesn’t have the skills to fix.

          • 0 avatar
            FreedMike

            @jmo:

            In real world testing, Car and Driver found the Taycan and the Model S had almost identical MPGe ratings.

            https://hmg-prod.s3.amazonaws.com/files/taycanvstesla-complete-specs-scoring2-1581112985.pdf

            But back to my point – yes, EV tech can be learned very quickly, and the Taycan you bring up is a good case in point.

            Five years ago, VW brought out its’ first EV, the E-Golf. Now, if you want to talk about poor range, look no further than that car – people got around 100 miles per charge, which is lame.

            Four years later, ion 2019, the Taycan comes along, and not only does it have an entirely reasonable 200 mile range, it goes 0-60 in ***2.4 freakin’ seconds***.

            And now they’re going to bring out a small electric CUV with 250 miles of range. That’s solid. And neither the Taycan nor the ID4 will be manufactured in tents.

            I’d say that’s pretty damn rapid progress.

        • 0 avatar
          28-Cars-Later

          Add a few zeros to that 1700 figure.

          @Freed

          “Wouldn’t surprise me if Tesla got bought.”

          By whom exactly? If we’re talking 51% controlling stake… who has $400 Billion and change? Apple? The Pentagon? Scrooge McDuck?

          • 0 avatar
            FreedMike

            @28:

            Like I said, it’d take a major downgrade in Tesla’s share price, but that’s not impossible to foresee if their fortunes decline.

      • 0 avatar
        jmo

        You’re missing one key part of this. Larry Ellison very rarely sells any stock. If he wants a new yacht or a new Hawaiian Island he borrows the money using his stock as collateral. Since the value of Oracle stock has risen much faster than his loan balance he gets to as they say, have his cake and eat it too.

        Your understanding of how it works at this level is very simplistic.

        • 0 avatar
          FreedMike

          It’s all well and good as long as the stock price stays high. The problem is that the stock price doesn’t always stay that way. You could ask Bernie Ebbers how that works, but I do believe he died in Club Fed.

          • 0 avatar
            ToolGuy

            @FreedMike, thanks.

            Yes Tesla’s valuation is high and yes it could drop and yes they could be acquired at that point.

            Yes the ‘established’ OEM’s can do innovative things – but it seems like it takes them ~5 years to decide to make a change and then ~5 years to implement the change (plus several years to sort out the new issues, but we’ll leave that out). Historically they don’t innovate at a very rapid clip. [They are moving faster (or planning to) now in some areas as a direct result of Mr. Musk.]

            (There are fundamental things related to manufacturing which some of the OEM’s don’t seem to be very good at, even after all this time, but we won’t get into specifics right now.)

        • 0 avatar
          sgeffe

          Or they jack up their already stratospheric support costs even higher! When I hear how much the county whose IT department in which I work pays annually, I always state that “there’s another spar for Larry’s yacht!”

  • avatar
    ToolGuy

    “Brother Elon, can you spare $100K?”

    Really?

    Let’s set Elon Musk aside (since you obviously have a lot of baggage there) and discuss Jeff Bezos.

    Jeff Bezos is a wealthy individual because several years ago he set himself some objectives and worked toward those objectives. His accomplishments improve the lives of other people (including me and people I know). His wealth is not sitting in stacks of cash, it is in the company he founded and continues to expand.

    Example:
    https://www.bbc.com/news/technology-55560414

    (Those of us who set low to no objectives and spend our time making excuses instead of progress should be hesitant to request outright charity. I include myself in this group.)

    • 0 avatar
      ToolGuy

      Tim Healey’s One Week Plan To Improve Life On Planet Earth:

      Monday: Liquidate Elon Musk’s Assets

      Tuesday-Friday: Distribute $25.65 to each human on the planet

      That’s it – done – plan over. We are all now better off? Or no?

      • 0 avatar
        SCE to AUX

        Tim was making a joke. A Depression-era dime from the man on the street would be like $100k to Mr Musk.

        • 0 avatar
          Tim Healey

          Yup, I was just joking. I don’t begrudge someone for being successful.

          I do think the valuation of Tesla is a bit high for reasons we’ve discussed ad nauseam around these parts but really I just wanted to end the post on a humorous note.

    • 0 avatar
      Lou_BC

      Elon Musk has a genius IQ. Most knuckle draggers out their aren’t going to change the world because they set a goal.
      A study looked at the number of generations it would take to go up a level in society. Even for more “socially” supportive countries it would take multiple generations. The USA rating was extremely poor.

      • 0 avatar
        ToolGuy

        @Lou_BC,

        I had my staff do a quick survey of the existing research, and it turns out that your sweeping generalization is 100% correct. OK wait, what is our cutoff for “knuckle dragger”? [We should be scientific about these things.]

        One of my guys ran across this (but he isn’t too bright):
        https://scholar.harvard.edu/files/aghion/files/social_origins_and_iq_of_inventors.pdf

      • 0 avatar
        Lou_BC

        @ToolGuy – I wasn’t talking about inventions. How many inventors become wealthy as a Gates, Jobs, Musk, or Bezos?
        Using the term “knuckle draggers” was sarcasm. Most lower simians drag their knuckles.
        Broad generalizations? Sure. This is a car blog not The Lancet or DSM IV.

        “(Those of us who set low to no objectives and spend our time making excuses instead of progress should be hesitant to request outright charity. I include myself in this group.)”

        I was responding to this statement that you made. It is very true BUT as I have pointed out, even if most of us were to set goals, we aren’t going to become another Elon Musk.

        Thanks for keeping me “on my toes” or will I have to clarify that one too?

  • avatar
    Lou_BC

    So perceived wealth is true wealth?

  • avatar
    Ralahamy

    Whenever a paradigm changing software product or tech-device generates rampant haters and avid religious believers it is sure sign the product will go on to be a dominant marketing success. Tesla is on the same trajectory as was Microsoft and Apple.

  • avatar

    What all that snark is about? Ys Elon is rich and he fully deserves that. He spend his money on new technologies to change the world for better.

    ” plagued with reliability issues.”
    Like all luxury vehicles.

  • avatar
    Lou_BC

    This just in… poor Elon just lost 14 billion. He’s now the 2nd richest guy.

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