Elon Musk has again lost his title of ‘world’s richest man’ just 48 hours after reclaiming the crown – dropping to second place after Tesla’s ‘failed’ Investor Day.
At the close of trading Wednesday, Musk’s net worth was down $1.91 billion on the day, to $184 billion. This places him below the $186 billion fortune of French luxury goods mogul Bernard Arnault, according to the Bloomberg Billionaires Index.
Musk, who spent much of 2022 at the top of the global wealth list, was surpassed by Arnault in December, but had regained the title on Monday as Tesla shares recovered from last year’s sell-off.
Tesla shares were down 1.7% at the end of Wednesday’s session, and dropped another 6% on Thursday morning after the company’s first Investor Day failed to impress investors.
The four-hour event revealed the company’s $10 trillion ‘Master Plan 3’ to eliminate fossil fuels, but was short on details about the timeline or any new Tesla products.
Investors and super-fans were expecting to see new prototype EVs take the stage at the event, but were instead shown a slide show with disguised future vehicles that would be revealed later.
Elon Musk has again lost his title of ‘world’s richest man’ just 48 hours after reclaiming the crown
French luxury goods mogul Bernard Arnault, the founder and chairman of Louis Vuitton maker LVMH, is once again ranked as the world’s richest person
Tesla shares were down 1.7% at the end of Wednesday’s session, and dropped another 6% on Thursday morning
‘The markets were primed for a big announcement, perhaps on something like a more affordable new model,’ said Russ Mould, investment director at AJ Bell. ‘It may just have been a case of failing to live up to the hype.’
Speaking at the Texas Gigafactory on Wednesday evening, Musk and his team outlined areas that need work to achieve the plan, including renewable power, electric vehicles, switching to heat pumps and sustainable fuel for planes.
Rockets, however, are not included because it is ‘a bit awkward,’ said Musk, who also runs SpaceX.
Investors had expected to see new electric vehicles revealed, but they received a ‘huge tease’ – a slide showing two disguised future vehicles.
‘I really wanted today to be not just about Tesla investors who own stock, but really anyone who is an investor in Earth,’ said Musk.
Tesla engineering and design executives presented examples of how the company can build cars for less than its competitors and how it is pushing to extend that lead.
Chief Engineer Lars Moravy said the company expects to build its next-generation vehicles for half the current Model 3 or Model Y cost.
Moravy described a production process for future EVs he called an ‘unboxed’ model that would deliver lower costs by snapping together sub-assemblies and reducing complexity and time in assembly.
Musk showed a chart of Tesla’s projection of the future electric fleet.
The slide depicted the EV maker’s existing models, including the Semi truck, as part of a market projected at 440 million vehicles.
It also highlighted the Cybertruck and a shrouded future model as part of a 300 million-vehicle market. An additional, smaller shrouded model was shown as part of the largest market in its projection: 700 million vehicles.
High-profile Tesla investor Ross Gerber tweeted that the presentation amounted to a ‘Huge tease’ on the next-generation vehicle. ‘It´s coming. They laid it all out. 50% less cost to build. Would get you a $25-$30k EV!’
Investors had expected to see new electric vehicles be revealed Wednesday, but they received a ‘huge tease’ – a slide showing two disgusted future vehicles
The slide depicted the EV maker’s existing models and two shrouded future models
Elon Musk hosted Tesla’s first Investor Day that will share details about the workings of the company
The main focus of Investor Day was on an Earth without fossil fuels.
‘Earth can and will move to a sustainable energy economy and will do so in your lifetime,’ Musk said.
Tesla has become the world’s most valuable car company.
Musk has aspirations of cracking the mass market and turning the EV maker into a company that can create a more climate-friendly world.
Tesla has recently outperformed the industry, increasing deliveries rapidly despite the pandemic and supply-chain disruptions.
But the company cut prices in recent months to boost sales, which were pressured by a weak economy and growing threats from rivals in the US and China.
The automaker has only four models, all priced toward the higher end of the market.
Tesla had promised to discuss expansion and capital expenditure plans, with various projects from batteries to self-driving technology to new factories, but the focus stayed on building a sustainable future.
News broke Tuesday that Tesla will break ground in Mexico for a new assembly plant worth more than $5 billion.
One Mexican official said the plant would be a Tesla ‘Gigafactory’ that could produce the Semi truck, Roadster sports car, and potentially other vehicles.
Another official said the plant could produce a kind of sport utility vehicle (SUV).
While the event was streamed online, it was also being held in person at the company’s Texas Gigafactory (pictured)
Musk revealed the idea of his Master Plan 3 last March, noting it would be dealing with topics like ‘scaling [production] to extreme size, which is needed to shift humanity away from fossil fuels, and AI’
Tesla has car factories in the US states of California and Texas, as well as in Berlin and Shanghai.
News about the plant in Mexico follows Tesla obtaining its own lane at the Mexico border crossing in 2022.
The exclusive border patrol lane sits between Texas and Nuevo León, Mexico, to reduce travel time for its suppliers.
With the carmaker’s exclusive border access, the trip for its suppliers is reduced to just 10 minutes – it can be more than 25 minutes during rush hour for normal traffic.
Tesla has six suppliers in Nuevo León, including APG Mexico and Taiwanese-based companies EnFlex Corp. and Quanta Computer.
Tesla’s lead designer Franz von Holzhausen also spoke at the event to discuss the Cybertruck, which he confirmed ‘is coming this year.’ Musk had previously said that volume production would not start until 2024.
The futuristic-looking vehicle has been hit with several delays, leaving millions of reservations unfilled.
Check-in for the event was at 2 pm and some attendees shared videos and images of the Cybertruck Beta prototype on Twitter.
Capturing the mass market is critical to Tesla’s goal of increasing deliveries 15-fold – to 20 million vehicles by 2030.
It was revealed that the Cybertruck is coming this year
Check-in for the event was at 2 pm and some attendees shared videos and images of the Cybertruck Beta prototype on Twitter
To do that, Tesla will have to improve its battery technology, which Musk has called the ‘fundamental limiting factor’ for the transition to sustainable energy, making it a likely topic for Wednesday’s address.
The plans for a more affordable car could draw the broadest interest.
In 2020, Musk unveiled a plan to develop batteries in-house, which he said would make self-driving electric cars priced at $25,000 feasible by 2023, but Tesla has been struggling to scale up the production of the so-called 4680 batteries.
Some investors are concerned that Musk is spending too much time on his latest major acquisition, Twitter.
After an ugly 2022, Tesla shares have rallied in early 2023, rising around 67 percent this year, a surge that has reestablished Musk as the world’s wealthiest person.
‘Investors are focused on what can change the narrative to continue the stock’s recent rally,’ Morgan Stanley analyst Adam Jonas said in a note.
Musk previously unveiled the first phase of his ‘Master Plan’ in 2006, which was focused on producing a luxury sports vehicle before more affordable autos.
The second phase included ambitious targets for solar panels, autonomous driving and producing a fleet of Teslas across major vehicle categories.
Musk has been credited with catalyzing a revolution in the global auto industry towards EVs, although he has still not met the significant target he has set for Tesla.