Elon Musk’s wealth slumped by $20 billion on Thursday, July 20, 2023, after Tesla Inc. warned it may have to keep cutting the prices of its electric vehicles, sending shares tumbling.
Musk’s fortune slumped to $234.4 billion, according to the Bloomberg Billionaires Index. This is the seventh-largest decline ever among those in the index.
The drop in Musk’s wealth narrows the gap between him and Bernard Arnault, the world’s second-richest person. Arnault’s net worth is currently $201.1 billion.
Tesla’s shares fell by 12.2% on Thursday, their biggest one-day drop since October 2020. The sell-off came after Tesla said it would cut prices for its Model 3 and Model Y vehicles in China.
The price cuts are a sign that Tesla is facing increasing competition in China, where it is facing competition from local electric vehicle makers such as BYD and NIO.
Musk has said that Tesla is facing “severe” supply chain constraints, which have been exacerbated by the COVID-19 pandemic and the war in Ukraine.
The price cuts in China are likely to have a negative impact on Tesla’s profitability in the short term. However, they could help to boost sales in the long term.
Here are some of the factors that have contributed to the decline in Elon Musk’s wealth:
- The ongoing sell-off in the stock market, which has seen the S&P 500 index fall by more than 10% this year.
- The rising cost of living, which is putting pressure on consumer spending.
- The ongoing chip shortage, which is disrupting production at Tesla and other automakers.
- The war in Ukraine, which is disrupting supply chains and causing uncertainty in the global economy.
It is too early to say whether the decline in Elon Musk’s wealth is a sign of a longer-term trend. However, it is clear that the billionaire is facing some headwinds in the near term.
Here are some additional details about the news:
- The price cuts in China are the latest in a series of measures that Tesla has taken to try to boost sales in the country. In recent months, Tesla has also reduced prices for its vehicles in the United States and Europe.
- The sell-off in Tesla’s shares on Thursday was also driven by concerns about the company’s production outlook. Tesla has said that it expects to produce fewer vehicles in the third quarter of 2023 than it did in the second quarter.
- The decline in Elon Musk’s wealth is a reminder that even the richest people in the world are not immune to the volatility of the stock market. Musk’s net worth has fluctuated wildly in recent years, and it is likely to continue to do so in the future.