Elon Musk’s Net Worth Increases To $32 billion As Tesla Tops Worlds Valuable Automaker
Tesla’s market cap hit $100 billion on Wednesday, speeding past Volkswagen, which currently sits at $88 billion. Tesla shares surged 16% in the week through January 23, increasing Elon Musk’s net worth by $1.7 billion to $32 billion.
The 49-year-old Tesla CEO, who owns nearly 22% of the electric vehicle maker’s stock, is currently the 28th-richest person in the world. He also has an estimated $12.5 billion stake in SpaceX, his privately held aerospace company known for reusable rockets.
Musk’s fortune has surged by more than $10 billion since The Forbes 400 list of richest Americans was published in October. If Tesla can sustain its $100 billion market cap, Musk stands to get even richer, thanks to a $346 million pay package tied to the stock’s performance.
Tesla shares have more than doubled since October and are up more than 30% this year — and it’s still only January. Tesla surpassed Ford and GM in market capitalization earlier this month. The only carmaker still ahead of Tesla is Toyota, with a market cap of $233 billion.
It’s a stunning feat for Tesla, which delivered 367,500 vehicles in 2019. This figure beat analyst estimates but is a drop in the bucket compared to other major automakers. Ford and GM delivered 2.4 million and 2.9 million vehicles, respectively, over the same period, while Volkswagen delivered nearly 11 million vehicles. The German automaker is also launching ID, its all-electric vehicle brand, this year. Research firm Wood Mackenzie predicts Volkswagen will be the largest producer of electric vehicles by 2028.
“It’s an open race,” Volkswagen CEO Herbert Diess told Bloomberg at the World Economic Forum in Davos, Switzerland. “We are quite optimistic that we still can keep the pace with Tesla and also at some stage probably overtake [Tesla].”
Wall Street analysts are far less enthusiastic about Tesla than investors. Out of a group of 37 analysts tracked by Bloomberg, 17 have issued sell ratings, 11 have issued holds and only nine have issued buys. Analyst consensus is far more positive for Volkswagen; out of 22 analysts, all but three have issued buys.
JPMorgan analyst Ryan Brinkman acknowledged there are some factors in Tesla’s favor, including its higher-than-expected earnings and the on-time launch of its new China plant, but he warned the joy ride may come to an end.
“Should investors be currently assuming that Tesla’s global operations will grow to be as large and profitable as Volkswagen’s?” Brinkman wrote in a research note. “Perhaps another conjecture could be that investors expect Tesla will grow to be only half as large but with twice the margin as Volkswagen. Or one-third the size with 3x the margin. Any of these assumptions seems to us highly speculative. We continue to urge caution with regard to Tesla shares, which appear highly overvalued based on our understanding of the fundamentals.”
With Tesla shares near an all-time high, all eyes will be on its earnings announcement coming on Wednesday January 29 .
“We believe Musk & Co. will not disappoint as underlying strength in China and Europe demand appear robust based on our analysis,” Wedbush analyst Daniel Ives said in a research note. “2020 represents a pivotal year for Musk & Co. with next week’s earnings likely a major step forward.”