According to Forbes, Elon Musk, the richest man in the world and the CEO of Tesla (NASDAQ: TSLA), has lost $121 billion since his net worth peaked in December. The sharp drop occurs as President Donald Trump’s new tariffs are making the stock of Tesla experience one of its worst declines of the year.
Musk’s fortune is cut short by Tesla’s stock routine.
Musk’s net worth dropped to $342 billion after he lost $8.8 billion on Thursday alone. He was worth $464 billion on December 17, just three months ago. Following Trump’s election triumph, Tesla’s stock shot up to $479 per share in December. However, it has since plummeted to $261 in after-hours trading, wiping out enormous profits. Trump’s tariffs on Canada, China, and Mexico caused the S&P 550 to lose 1.78% on Thursday, which made Tesla’s problems even worse. Investors have been alarmed by the ambiguity surrounding trade rules, which has contributed to the company’s continuous stock meltdown.
Tesla’s business model is negatively impacted by tariffs.
Since China continues to be Tesla’s second-largest customer market, trade disputes pose a severe risk to the company’s financial stability. Similar to other American automakers, Tesla manufactures a large portion of its cars using parts imported from Canada. In January, Vaibhav Taneja, the company’s chief financial officer, had previously alerted investors to the possible harm that tariffs would do to the business.
Investor Confidence is Shaken by Political Uncertainty
Since Musk had contributed $300 million to Trump’s campaign and other Republican initiatives, investors had high hopes that his administration would improve Tesla’s lot. However, Tesla’s stock has declined since Trump’s tariff threats became real, reflecting the overall volatility of the market. Economists contend that rising unemployment and unpredictable policy changes are escalating investor apprehension and causing general market instability.
Tesla’s Brand Image Is Damaged
In addition to its financial problems, Tesla is dealing with a developing brand issue. The company has experienced a steep drop in sales throughout Europe after Musk took a position as a “special government employee” for the Department of Government Efficiency, a project that has resulted in the elimination of thousands of governmental positions. Musk’s divisive political persona has even sparked animosity toward Tesla owners. After being harassed during the Mardi Gras parade in New Orleans, a Tesla Cybertruck in the United States needed a police escort. Authorities suspect arson after a French showroom fire damaged 12 cars and Tesla power plants in Massachusetts were set on fire.
Musk is still the richest man in the world—for the time being.
Musk remains comfortably the richest person in the world despite the decline in wealth. On election day, his net worth was $78 billion less than his estimated $342 billion fortune. His diverse investments in xAI and SpaceX have lessened the financial impact. But Musk might experience more drops if Tesla’s stock keeps plunging, endangering his standing.