While Tesla's ballooning stock price is at the heart of how CEO Elon Musk has managed to become the undisputed richest person in the world, its recent losses articulate how harmful even small drops to the car company's value can be to Musk's overall wealth.
Elon Musk has been the richest individual in the world for a number of years now, and only just recently topped the Forbes rich list for 2025 with an overall net worth of $342 billion - nearly $130 billion more than the next richest person.
Near the end of 2024 saw Musk become the first person ever to see their net worth surge beyond the $400 billion mark, but recent economic instability has seen his fortunes dwindle and around $116 billion fall out of a hole in his pocket.
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He was one of the many major winners to see dramatic financial gains following Donald Trump's victory in the US election last November, and his control over three incredibly valuable companies - Tesla, SpaceX, and xAI - puts him in a fantastic position.
However, Tesla - the primary source of Musk's immense net worth - has undergone dramatic value drops on the stock market as a consequence of President Trump's tariffs, instability surrounding foreign AI developments, and also a growing negative sentiment towards Musk due to his current role in US politics, and even otherwise minor declines have seen him loose eye-watering sums.
As reported by the International Business Times, Elon Musk loses roughly $1,000,000,000 every time that Tesla's stock drops by just $2.43.
When considering the fact that Tesla's individual stock price has dropped $197.10 from its December 17th peak of $479.86, you can now understand how harmful that would be for Musk, even if he remains uncontested at the top of the rich list.
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The reason why otherwise inconsequential declines in Tesla's value are so harmful to Musk is because of how much stock he owns overall.
As of December last year, Musk owned 410,794,076 shares of the electric car company, which equate to 12.7% of the company he fought for a right to be a 'founder' of.
At its current stock market value, that means that Musk's shares of Tesla equate to $116,156,132,929.76 - or just under a third of his overall net worth - whereas at its peak it would have been worth around $197,123,645,309.36.
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While SpaceX remains likely the world's most valuable private entity, and xAI recently received a boost after merging with Musk-owned social media platform X, Tesla remains fundamentally Musk's dominant source of financial power so the recent decline on the stock market is going to hurt.
It's also why there have been protests scheduled worldwide against Tesla as a means of lowering the EV manufacturer's stock price and thus hurting Musk from a monetary perspective, as many people believe that he has used his significant monetary strength to gain meaningful political power.