Tesla CEO Elon Musk saw his net worth increase by a staggering $26 billion after Tesla’s stock experienced its most substantial surge since 2013. Following an optimistic earnings report, Tesla’s shares skyrocketed 22%, lifting Musk’s fortune to approximately $269 billion, as reported by Forbes. This gain puts him over $50 billion ahead of Larry Ellison, Oracle’s largest shareholder and a former Tesla board member. Musk holds around 13% of Tesla’s outstanding shares, which remains the primary source of his wealth. Additionally, he controls a significant portion of SpaceX, valued at over $200 billion on private markets, and owns X (formerly Twitter) and the AI startup xAI.
Musk’s financial gains on paper could potentially grow even further, pending the results of a shareholder lawsuit concerning his 2018 compensation package, currently progressing through the court system. Tesla’s recent rally reflects investor confidence following Musk’s projection of vehicle growth between 20% and 30% for 2024. This rebound was particularly notable, as Tesla’s stock had been underperforming throughout the year and appeared headed for its worst month since January. The recent gains have erased its 2024 losses, placing it up by 5% overall.
Strong Earnings and Autonomous Ambitions Drive Tesla’s Stock
Tesla’s earnings report revealed an adjusted earnings per share of 72 cents, beating analyst predictions of 58 cents. Revenue was bolstered by $739 million from environmental regulatory credits and $326 million from Full Self-Driving (FSD) system sales. During the earnings call, Musk emphasized Tesla’s commitment to autonomous technology, promoting a vision for a self-driving future. He previewed a ride-hailing service in Texas and California that could go live as early as next year. The announcement followed Tesla’s recent robotaxi event, where it showcased its Cybercab, signaling Tesla’s ambitious push toward autonomous ride-hailing services.
However, Tesla’s autonomous goals have often faced delays. Unlike Alphabet’s Waymo, which has operated a commercial driverless service since June, Tesla still does not produce vehicles that can operate entirely without human oversight. This cautious approach to full autonomy remains a source of frustration for some investors and consumers. Further, while Tesla introduced concepts like a heavy-duty Semi truck and a redesigned Roadster in 2017, production on both models remains limited, with the Roadster still in the design phase and the Semi in pilot production.
Political Involvement Raises Questions Among Investors
Musk’s political activities, particularly his outspoken support for former President Donald Trump, have stirred concerns among investors. Following Musk’s endorsement of Trump, he has intensified his political involvement, especially in Pennsylvania, a key swing state. He recently pledged a daily $1 million sweepstakes aimed at encouraging voter participation for Trump, with funds directed toward a pro-Trump political action committee. However, the U.S. Department of Justice has reportedly cautioned Musk’s PAC about potential violations of federal election laws, raising further scrutiny.
This activism prompted questions from investors on Tesla’s online forum, where some expressed concerns about the potential impact of Musk’s political engagement on Tesla’s shareholder value. One investor noted that while Musk is entitled to his views, his high-profile activism may clash with his duty as CEO to prioritize Tesla’s market performance and protect shareholder interests. Another investor query, which gained over 500 upvotes, questioned the company’s board on how it plans to manage Musk’s political activities to ensure they do not detract from Tesla’s mission or brand reputation.
