Owner of Tesla and Twitter, Tech Billionaire, Elon Musk received a hefty blow on his treasury this week, when the groundbreaking revelation about a loss of $20 billion happened to his electric vehicle industry. However even despite such numerically strong loss, Musk retains the position of being the World’s Richest Man alive. The loss of finances were majorly due to the tumbling figures in the share market of Tesla. Interestingly, Elon Musk’s fortune still exceeds that of Arnault, chairman of luxury goods maker LVMH, by about $33 billion.
As reported in their blog by The Hindustan Times, The drop in net worth to $234.4 billion is the seventh-largest decline ever among those in the Bloomberg Billionaires Index, and further narrows the wealth gap between Musk and Bernard Arnault, the world’s two richest people. Not only Elon Musk, but several other US technology billionaires also faced a challenging day. Prominent figures like Jeff Bezos from Amazon.com Inc., Larry Ellison from Oracle Corp., former Microsoft Corp. CEO Steve Ballmer, Mark Zuckerberg from Meta Platforms Inc., and Alphabet Inc. co-founders Larry Page and Sergey Brin collectively lost $20.8 billion in net worth as the tech-heavy Nasdaq 100 experienced a 2.3% decline.
Tesla, headquartered in Austin, witnessed a significant decline in its shares, plummeting 9.7% to $262.90 in New York, marking the largest drop since April 20. The company issued warnings of potential further impacts on its already dwindling profitability. The continuous markdowns over the past months have adversely affected the automotive gross margin, reaching its lowest point in four years during the second quarter. Elon Musk, the CEO of Tesla, expressed concerns about the rising interest rates, stating that the company might be compelled to continue reducing prices to adjust to the changing economic conditions.
Months of markdowns have taken a toll on automotive gross margin, which fell to a four-year low in the second quarter. Musk said Wednesday Tesla will have to keep lowering prices if interest rates continue to rise. Investors and industry experts will be closely monitoring Tesla’s next moves and how it plans to regain lost ground. For now, Elon Musk and his team will have to navigate the storm and prove their mettle in the face of adversity.
The combination of supply chain disruptions, increased competition, regulatory challenges, cryptocurrency volatility, and leadership concerns has contributed to this downturn. However, Tesla’s past successes and groundbreaking contributions to the electric vehicle industry make it a company with significant potential for recovery.
