How Elon Musk stole the show and became the richest in the world in 2021


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WIt’s been a year for Elon Musk. When the world rang in 2021, Musk, the chief executive of Tesla and rocket company SpaceX, was worth around $ 155 billion. Now, almost a year later, his fortune has reached unfathomable heights. As of December 17, the 50-year-old was worth $ 245.1 billion, a gain of $ 90 billion since January 1.

In two years, Musk’s fortune jumped $ 200 billion. During 2020, he made more than $ 110 billion, setting the record for the biggest single-year payout of all billionaires. Forbes never followed.

The main reason: the Tesla share price, criticized by some for being already too high, has continued to rise. Shares are up 32% year-to-date through December 17. In early November, Musk first crossed the never-hit $ 300 billion mark, making him the richest person to ever walk the planet. The stock has since fallen almost 24% since its peak on Nov. 4, as Musk unloaded millions of shares and tweeted with abandon about the possibility of leaving his job and more.

“This has been a pivotal year for Tesla, with competition from all angles, a chip shortage and stocks emerging from a historic year,” said Dan Ives, managing director and senior equity analyst at Wedbush. “Despite the odds, Tesla was able to smell a rose.”

It was also a historic year at SpaceX. This fall, the aerospace company launched the world’s first fully civilian crew into orbit; the private company’s shares also traded in the secondary market at a valuation north of $ 100 billion, up from $ 74 billion in February. (Musk’s stake in SpaceX is estimated at $ 32 million.) weird tweets

Take a look at some of Musk’s highlights from a wild 2021:

Regulatory problem with China

Tension between Musk and Chinese regulators hung over Tesla shares for the first half of the year, according to Ives. China, where Tesla has a factory, is a lucrative market for the company, accounting for about a quarter of total revenue for the first nine months of 2021, according to the company’s third quarter. earnings report. But as Beijing cracked down on domestic tech players this year, it enacted strict regulations on the collection of automotive data and the ability to transfer that data out of the country. This threatened to hamper Tesla’s R&D efforts, as the automaker collects a lot of user data from cameras and sensors on its vehicles to fine tune its autonomous driving systems. Tesla also came under scrutiny after a protester at the Shanghai Auto Show in April would have rode on top of a Model3 and criticized a braking problem with the vehicles.

A turning point came in September, when Musk spoke at the annual World Internet Conference in China, reassuring government leaders that Tesla was committed to expanding in the country. “We are working with regulators to find the best solution for data security,” Musk said at the conference, denoting a new data center that Tesla has set up in China to locally store “personally identifiable information” without transferring it across the border.

Ives’ point of view: “If Musk didn’t play well in the sandbox with China and turn things around, he wouldn’t be sitting in a position of strength, and Tesla wouldn’t be where he is. today.”

Flea shortage

Semiconductors are a key part of new cars, powering things like infotainment systems, engine management, brake assist and steering. Supply chain problems created a shortage of these chips in 2021, hitting automakers like General Motors and Ford hard, but, Ives said, Tesla weathered the shortage largely unscathed.

That’s because Tesla has been producing its chips in-house for years, made with a new material technology called silicon carbide that reduces reliance on pure silicon. As a result, the shortage has not hampered Tesla’s vehicle production targets, although the company’s Fremont, Calif., Plant shut down production for two days in February due to what Musk said. loosely identified as a “parts shortage”.

Tesla exceeds $ 1 trillion valuation

Tesla’s inventory boomed in October, when rental car giant Hertz announced it was purchasing 100,000 Tesla vehicles to add to its rental car fleet.would have agreed to spend around $ 4.2 billion to do this. Following the news, Tesla’s market cap topped $ 1,000 billion for the first time, and Musk’s net worth soared above $ 300 billion, making him the richest person of all. time.

As of December 17, he is worth around $ 245.1 billion and is still the richest person in the world, followed by Amazon founder Jeff Bezos, French fashion mogul Bernard Arnault and Microsoft founder Bill Gates.



SpaceX makes history

As Musk’s wealth has reached new heights, his intergalactic efforts have also increased. In mid-September, SpaceX launched the first fully civilian crew in orbit, further opening the door to the nascent space tourism industry. The crew of four, which included fintech billionaire Jared Isaacson, spent three days circling the globe. It was a key part of the space race between billionaires Musk, Jeff Bezos and British billionaire Richard Branson. While Musk hasn’t personally flown to space this year, his rivals have. Bezos was aboard a BlueOrigin rocket that launched into orbit in July, about a week after Branson joined a similar trip operated by his space tourism company Virgin Galactic. (Musk has also booked a ride on a future Virgin Galactic space escapade, although it is not known exactly when it will take off.)

Stock sale bonanza

On November 6, Musk sent shockwaves through the business world with a Twitter poll casually asking his followers if he should sell 10% of his Tesla shares. Musk had previously only sold Tesla shares twice, in 2010 and 2016. Two days later, Musk began selling shares and exercising stock options that were due to expire in August. 2022. On December 13, he had sold nearly $ 13 billion in Tesla shares. ; Forbes estimates he could pay $ 8.3 billion in taxes as a result of those sales, making him perhaps the largest taxpayer in the United States (Musk claimed on Twitter that he “will pay more taxes than any American in history this year.” “)

“It was, of course, a PR move, too,” Ives said of Musk’s Twitter poll. “If he just started selling stocks out of nowhere, then the stocks would have collapsed.”

Forbes calculates that Musk has accumulated about $ 4.4 billion in cash (after tax) from sales of shares through December 13.

Bet on Texas

Musk moved all-in on the Lone Star State in 2021. By June, he had sold six of his seven California mansions and his last remaining home was on the market. His primary digs these days? A “foldable and prefabricated” home about 400 square feet the size of a studio, located in Boca Chica, Texas, where SpaceX produces its Starship rockets.

After feuds with California lawmakers over Covid-19 safety rules at Tesla’s Fremont plant from 2020, the billionaire announced plans to move Tesla’s headquarters from Palo Alto to Austin, TX at the annual meeting of shareholders in October 2021. Musk took a more diplomatic approach at the meeting, citing the costs California’s very high housing costs and long commute times as the main reasons. lead the move. The move was completed in early December, although it is not known how many Tesla employees will move to Austin or how many new jobs could be created.

Another billionaire breakup

Musk’s personal life has also taken a turn. In late September, he reportedly parted ways with Grimes, the daring grunge musician he dated for about three years, just weeks after attending the Met Gala together. The couple welcomed a son named X Æ A-Xii Musk into the world in May 2020.

New year’s resolutions?

The holiday season usually breeds billionaire philanthropy, but giving doesn’t seem like a priority for the richest person in the world this year. Musk signed the Giving Pledge, a pledge to give at least half of his fortune to charity, almost ten years ago. Forbes estimates that so far Musk has donated less than 1% of his fortune to charitable causes.

Ives predicts that 2022 will bring new adoption of electric vehicles and increased competition, so Tesla will laser focus on increasing production capacity at its key factories in Berlin and Austin, TX. Tesla could increase its overall production to two million cars per year, from around one million currently, Ives says. By comparison, Toyota, GM and Ford each sell more than four million vehicles per year, although only a fraction are electric vehicles.

“We are really witnessing a [electric vehicle] the arms race is on, ”says Ives. “Tesla is years ahead in battery technology … but there is a target behind Tesla’s back.”

That should make 2022 another interesting year for Musk, if he doesn’t cash in his chips. December 9 he tweeted that he was “Think about quitting [his] jobs and become a full time influencer. Of course, the richest person in the world has billions of reasons to stay, in addition to their passion for changing the world: Musk’s Tesla Compensation Package includes 36 million more options, worth almost $ 32 billion, if he can keep the company’s investors happy and the stock price. in the midst of forces greater than he can control.


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