Elon Musk, the richest person on the planet with a fortune of $209.8 billion, faced a setback on Thursday as his wealth plummeted by $15.9 billion. The decline came as a result of Tesla Inc.'s disappointing third-quarter earnings, which took a toll on the company's shares. Musk owns 13% of Tesla and derives the majority of his wealth from the auto company, making him particularly vulnerable to its performance. Tesla's shares dropped by 8.8% after the company missed both earnings and sales expectations for the quarter.
During a conference call following the earnings release, Musk highlighted the impact of high interest rates on consumer confidence. He expressed concerns over how this has affected the company's sales figures. Indeed, Tesla reported a decline in sales for the first time this year, with 435,059 vehicles delivered. Additionally, the company's margins dropped to their lowest point in over four years due to multiple price cuts on its cars.
Despite these challenges, Musk's wealth has still seen a significant increase of over $70 billion in 2021, mainly due to the rebound of Tesla shares. This resurgence has catapulted Musk back into the position of the world's wealthiest person, surpassing even Bernard Arnault of LVMH by a substantial margin.
Nevertheless, Tesla remains optimistic about its future prospects. The company asserts that it will put 1.8 million customers into new vehicles by the end of the year, despite the current struggles. Despite the disappointing earnings report, Tesla maintains its position as the most valuable vehicle producer globally. The company also plans to finally deliver its highly anticipated Cybertrucks in November, albeit about two years behind schedule.
While Musk's wealth may have taken a hit, it is worth noting that he remains a prominent figure in the business world. With his ambitious vision for Tesla and other ventures like SpaceX, his influence and reputation continue to drive curiosity and investment. As Tesla navigates through its challenges, the market will undoubtedly be watching closely to see how the company bounces back and what it means for Elon Musk's fortune in the long term.