Elon Musk, the influential CEO of Tesla and SpaceX, has seen his net worth soar to unprecedented heights, surpassing $400 billion in 2024. This remarkable wealth is primarily attributed to his substantial holdings in Tesla, which constitutes approximately 58.3% of his assets, and SpaceX, contributing 26.6%. However, despite Musk’s escalating financial stature, Tesla’s stock has experienced a significant downturn, raising questions about the factors influencing this decline.
In December 2024, Musk’s net worth peaked at $486.4 billion but has since receded to around $330 billion as of March 2025. This reduction aligns with a notable drop in Tesla’s stock value, which has been linked to Musk’s recent political engagements. Specifically, his involvement in the Trump administration’s efforts to reduce federal spending has been met with mixed reactions from investors and the public alike.
Prominent Tesla investor Christopher Tsai expressed hope that Musk’s political role would be brief, allowing him to refocus on his business ventures. Tsai’s firm, Tsai Capital, holds a significant stake in Tesla and has benefited from its growth since 2020. However, the recent stock decline and Musk’s waning approval ratings have raised concerns. Tsai maintains confidence in Tesla’s potential but acknowledges that Musk’s political involvement and prior acquisition of Twitter have contributed to market apprehension.
The adverse reaction in the stock market is also reflected in Tesla’s performance metrics. The company’s market capitalization has fallen to $740 billion, dropping it from the top seven among S&P 500 companies. Tesla’s operating margins and earnings are lower compared to other tech giants, and its stock price has been highly volatile. The company’s valuation remains high at 85 times earnings, but the recent sales slump and stock volatility indicate underlying issues. Analysts emphasize that investor confidence hinges on Musk’s ability to stabilize the company and deliver on promises such as new models and a robo-taxi service.
Public perception of Musk has also shifted. Former astronaut and Senator Mark Kelly publicly criticized Musk, referring to him as an “reckless” and replacing his Tesla vehicle with a gasoline-powered Chevy Tahoe Z71. Kelly’s actions reflect a growing disapproval of Musk, whose popularity has declined, negatively impacting Tesla’s sales and stock value.
These developments underscore the complex interplay between Musk’s personal endeavors, political involvement, and Tesla’s market performance. As Musk’s influence continues to expand, the repercussions on Tesla’s stock highlight the challenges of balancing multifaceted roles in business and politics.
