Tesla, as of this writing, is worth $514 billion, less than Berkshire Hathaway but only a little less. That’s over 20 times as much as Tesla’s revenue in 2019, which people smarter than me will tell you is a somewhat unusual situation. It also makes the CEO, Elon Musk, the world’s second-richest person.
That’s according to Bloomberg, which says that Musk’s wealth has increased to $127.9 billion, rising a ridiculous $100.3 billion this year alone. Musk zoomed past Bill Gates in Bloomberg’s wealth ranking, and is now second only to Amazon person Jeff Bezos.
This does not mean that Musk has $127.9 billion in liquid cash; rather, Bloomberg says that around three-quarters of Musk’s wealth is in Tesla stock, mostly options that he can’t cash out for years. That also means that Musk’s net worth — again, on paper — is inherently tied to Tesla’s stock price.
And right now, Tesla is booming, with its share price more than tripling in the past six months. That’s been accelerated in part by Tesla’s inclusion in the S&P 500 as well as being driven by irrational exuberance in the electric car market, driven by the success of the Model Y, driven by the election of Joe Biden and driven as always by the cult of Musk’s personality.
Shares of other electric vehicle (EV) makers have also risen in the last few months as President-elect Joe Biden made boosting EVs a top priority during his campaign.
“One of the core underpinnings of the Biden platform will be around pushing clean energy and zero-emissions vehicles with hopes of accelerating the deployment of electric vehicles and public charging outlets by 2030,” Wedbush analyst Daniel Ives said in a note.
This is good news, though pretty much limited to Musk and Tesla shareholders, and terrible news for the Tesla shorts. For the rest of us, meanwhile, the Tesla news that matters today isn’t about the stock but about Musk’s talk of making a compact car. The car would probably be just for Europe and China, because Americans don’t deserve the nice things. It appears that Musk has come to this decision in part because he had trouble finding a parking spot for a Model X in Berlin.
Also from Reuters:
“Possibly in Europe it would make sense to do, I guess, a compact car, perhaps a hatchback or something like that,” Musk told an European online conference on batteries hosted by the German government.
Musk said he had had some problems parking his five-metre long Tesla Model X car in German capital Berlin.
“I was driving a Model X around Berlin and we had quite a bit of trouble finding a parking space where we could fit,” he said.
It is fun to imagine Elon cruising the streets of Berlin for a parking spot large enough for a Model X; a Model 2, on the other hand, would be shorter, but more importantly, it would also likely be cheaper. If Musk is serious about a $25,000 Tesla, it makes all the sense in the world.