Amid Tesla’s stock market crash, Musk loses the world’s richest crown

According to the Bloomberg Billionaires Index, Elon Musk is no longer the richest person in the world as shares of Tesla (TSLA) continue to fall.

Musk moved into second place behind LVMH CEO Bernard Arnault as his net worth to date plummeted by $107 billion in 2022. Musk is now worth $164 billion, while Arnault is worth $171 billion, as of December 14.

Behind Musk is Indian billionaire and industrialist Gautam Adani with $125 billion, followed by Amazon CEO Jeff Bezos and Microsoft founder Bill Gates, both with $116 billion. Rounding out the top 10 are Berkshire Hathaway CEO Warren Buffett, Oracle co-founder Larry Ellison, former Microsoft CEO Steve Ballmer, Indian businessman Mukesh Ambani and Google co-founder Larry Page.

Musk’s net worth is largely tied up in Tesla stock, meaning what made him the richest person in the world – Tesla’s market cap has exploded in recent years – is also what knocked him out of the top spot when Tesla’s market cap fell from $1 trillion in October 2021 to about $500 billion as of Tuesday’s close.

Musk’s compensation package as CEO of Tesla totals $56 billion and allows him to buy 1% of the EV giant’s stock at a deep discount whenever certain business goals are met.

Tesla is having a really bad 2022

Tesla shares are down more than 50% year to date amid downside catalysts including China’s zero-COVID policy, Musk’s acquisition of Twitter and increased competition in the electric vehicle space.

China implemented a zero-COVID policy, which meant strict lockdowns to prevent further infections. However, that also meant closing Tesla’s Gigafactory in Shanghai, which will account for about 52% of the company’s global shipments in 2021. (China is the largest car market in the world.)

“You’re starting to see some demand cracks,” Wedbush senior analyst Dan Ives said of Tesla. “I don’t believe the longer term narrative is being thrown out the window in China, I just think they’re really navigating now, for the first time in years, some growth challenges, they’re cutting prices, … some reductions in the supply chain, and now we need to see 2 million units not just in the fourth quarter, but in 2023, that’s the line in the sand globally.

Ives removed Tesla from Wedbush’s “Best Ideas” list and lowered the price target from $300 to $250.

“In what has been a dark comedy show with Twitter, Musk has essentially tarnished the Tesla story/stock and may be starting to impact the Tesla brand with this ongoing Twitter trainwreck disaster,” Ives wrote in a note at the time.

The note also questioned Musk’s leadership in the tumultuous aftermath of his $44 billion acquisition of Twitter. Several analysts see Musk owning and running Twitter as a distraction to Tesla.

Elon Musk, CEO of Tesla, arrives at Gruenheide, Germany on September 3, 2020 to take a look at the construction site of the new Tesla Gigafactory.  (Photo by Maja He/Getty Images)

Elon Musk, CEO of Tesla, arrives at Gruenheide, Germany on September 3, 2020 to take a look at the construction site of the new Tesla Gigafactory. (Photo by Maja He/Getty Images)

“Perception is reality,” Alyssa Altman, transportation and mobility lead at Publicis Sapient, told Yahoo Finance last month. “Everyone sees Elon Musk turning Twitter upside down overnight and believes he will lose sight of Tesla and his other complex companies.”

While someone would take over his role of running Twitter, Musk would be freed up and his attention could turn back to Tesla, a Tesla board member recently said Musk had found a potential successor to lead the EV giant. Following the news, the stock hit its lowest level since November 2020.

Tesla has also faced increased competition in the EV industry.

The company still remains the leader in global EV market share, but established automakers such as GM, Ford and Volkswagen are threatening that position.

GM Vice President of EV Ecosystem Hoss Hassani recently told Yahoo Finance Live that his company’s vision is “to have everyone in an EV.”

Meanwhile, Ford has enjoyed great success with its EV offering, as the company reported a more than 100% increase in sales in November 2022 and claimed it now accounts for 8.6% of the EV market share.

Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at adriana@yahoofinance.com.

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