Elon Musk — CEO of Tesla, Space X and Twitter — got bumped off the top billionares spot after his net worth fell 7%, or about $2 billion down on Thursday (March 3, 2023) to $184 billion, according to the Bloomberg Billionaires Index.
The massive single-day drop in share price made him slide back to No. 2 among the world's richest, after LVMH CEO Bernard Arnault, who kept his family’s estimated net worth at $186 billion.
Underwhelming Investor Day
The switch took place 48 hours after Musk overtook the Arnault family’s net worth. The Frenchman had unseated Musk in December after Tesla's share price fell by 65% in 2022 — thanks to a huge rise in rates that drove investors away from stocks as well as Musk's controversial buyout of Twitter.
Tesla’s stocks dropped by 1.4 per cent to $202.77 on Wednesday, followed by after-hours trade decline of 5.7 per cent on the heels of Tesla's Investor Day in Austin, Texas on March 1, 2023. Musk's net worth is derived from his 13 per cent stake in the EV maker.
A drop in the company's share price immediately hits his personal fortune. On Wednesday, Musk and his team made a nearly four-hour presentation that failed to impress investors looking out for an announcement on an affordable EV.
Masterplan 3, but no $25,000 EV
Investor sentiment may have taken a beating as Tesla gave an underwhelming announcement during the March 1 Investor Day event in Texas, where Musk paraded his top executives.
Tesla was widely expected to unveil a cheaper, $25,000 electric vehicle as part of the so-called Masterplan 3 unveil at Wednesday's event.
That did not happen.
Instead, Musk talked extensively about Economics 101 and why he thinks demand for Tesla EVs far outstrips supply.
Heat pumps, an electric heating technology that works a bit like a refrigerator in reverse, are already installed in Tesla's Model Y SUV and in newer versions of the company's other models.
In 2020, Musk lauded Tesla's in-car heat pump, telling investors then that it was key to the Model Y's superior range.
Musk added he was "extremely excited" to build a home heating, ventilation and air-conditioning system that could include particle filtration.
He figures that home heat pumps, in high demand in colder climes, could reduce global carbon dioxide emissions by at least 500 million tons by 2030.
Installations exploded last year in Europe as Russia's invasion of Ukraine led countries such as Poland to rapidly ramp up their heat pump programs.
In the US, a new law offers incentives for households to install a heat pump, which is expected to boost the market.
They laid out fresh plans to cut assembly costs by half, invest in a new plant in Mexico, plans to scale production, in general how they're leading the drive towards a renewable economy — a thing both most followers and short-sellers already knew.
Despite Wednesday’s drop, however, Tesla’s market value is still up 65% since January 2023, as demand for its EVs greatly improved following tax credit changes in the US for electric vehicles and Tesla’s aggressive price cuts.
(With inputs from Bloomberg, Washingtom Post.)