The recent rally in the stock of US-based electric vehicle (EV) maker Tesla Inc has propelled its founder Elon Musk to new levels of wealth.
With $335.1 billion in his pocket, Musk is now richer than two other American tech zillionaires put together — Amazon founder Jeff Bezos, who holds $192.1 billion, and Facebook founder Mark Zuckerberg, who holds $121 billion. Also, the 50-year-old Musk is now thrice as rich as 91-year-old investment guru Warren Buffett, whose wealth stands at $104 billion. In fact, last month itself, his wealth was more than the combined wealth of Microsoft’s Bill Gates and Buffett.
For another point of comparison, the Tesla founder’s wealth is greater than the gross domestic product (GDP) of South Africa, his home country. Last year, per World Bank data, South Africa’s GDP stood at $301.9 billion. Media reports went on to point out that what Musk has gained in 2021 alone — $165 billion — would be ranked fourth on the billionaires’ list, after Musk himself, Bezos and Bernard Arnault (Chairman and CEO of luxury goods giant LVMH Moët Hennessy).
Behind the rocketing wealth
The recent boost in Musk’s wealth was fuelled by a substantial increase in Tesla’s share price. With a 22.4% stake in the EV maker, his wealth has grown by $165 billion in 2021, per Bloomberg data. The Tesla scrip has surged 65.6% over the year in spite of declines seen in March and May.
Last week, Tesla bagged its biggest ever order — car rental firm Hertz signed up for 100,000 vehicles, to be delivered by 2022-end. Buoyed by the news, Tesla’s market capitalisation zoomed past the $1 trillion mark, as investors rejoiced over the indisputable evidence that EVs are now here to stay. The 13% jump in Tesla share last week alone yielded Musk $36 billion in add-on wealth.
While Tesla remains the golden goose for Musk, analysts think his space travel venture SpaceX may soon prove a more lucrative bet. Not only is SpaceX a pioneer of sorts in space travel, but also holds the potential to tap into other sectors, such as Earth observation, deep space exploration and space infrastructure.
It may be noted that Starlink, the satellite internet division of SpaceX, recently opened Indian operations. Registered as Starlink Satellite Communications Pvt Ltd, it is likely to apply for licences to offer broadband and other satellite-based communication services in the country. Tesla, meanwhile, has said it will enter the Indian market only if the duty structure on EVs is made more amenable to foreign companies.
Dollars that matter
Noting the fall in Buffett’s ranking on the wealth list, observers were quick to point out that it is largely due to his philanthropic activities. The multi-millionaire has donated a significant portion of his Berkshire stock each year to charitable institutions including the Bill & Melinda Gates Foundation, where he was also a trustee until recently.
While Musk has made several corporate pushes toward causes such as green energy and tech education, his philanthropic activities are not widely talked about. His Musk Foundation, launched in 2002, has been supporting select charitable causes. The tech mogul has also signed the Giving Pledge, under which one commits to give away at least half of one’s wealth to charity.
Musk’s philanthropy hit the news recently when David Beasley, Executive Director for the UN World Food Programme (WFP), remarked in a media interview that “2% of Elon Musk’s wealth” ($6.7 billion as of now) would solve the world hunger problem.
The Tesla founder shot back that he would right away sell the company’s stock worth $6 billion if the WFP would explain how the funds would be used to solve world hunger. “If WFP can describe on this Twitter thread exactly how $6B will solve world hunger, I will sell Tesla stock right now and do it,” tweeted Musk. “But it must be open-source accounting, so the public sees precisely how the money is spent.”
Beasley responded with: “We’ve never said $6B would solve world hunger. This is a one-time donation to save 42 million lives during this unprecedented hunger crisis.”
Musk replied to that with: “Please publish your current & proposed spending in detail so people can see exactly where money goes. Sunlight is a wonderful thing.”