- Elon Musk is no longer the world’s richest person.
- The magnate’s wealth dropped $27 billion in the first week of March amid a selloff in Tesla stock.
- EV stocks across the board had a rocky week after surging at the beginning of the year.
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Electric vehicle stocks have been on a tear in 2020, fueled by a storm of reverse-mergers, technical breakthroughs, and potential political help.
But heavy selling amid broader market weakness last week caused headaches for some investors. For industry titan Elon Musk, it meant a $27 billion dent in his Tesla fortune, according to Bloomberg’s Billionaires Index.
As Tesla shares tumbled more than 16% the week of March 1, so too did the wealth (on paper at least) of Musk, its chief executive and largest shareholder. A rout of about the same percentage since the beginning of year dented Musk’s historic riches, sending him to second place on a ranking of the world’s wealthiest.
At $157 billion, Musk now trails Amazon chief executive Jeff Bezos, the world’s richest person, by about $20 billion. Luckily for Musk, the Tesla losses are padded partially by continued gains for SpaceX, a private entity in which he also holds a massive stake, which continues to garner new investment and higher valuations.
Tesla wasn’t the only electric vehicle stock to stutter following months of searing gains. Chinese startup Nio has declined about 40% from a February high, with its competitors like XPeng and Li Auto falling similar amounts.
Recent names to go public via special purpose acquisition companies, or
‘s — including Canoo, Nikola, Lucid, Fisker, and others — also saw heavy selling from February into March.
A shortage of critical microchips is also affecting new and entrenched automakers around the world, with the White House pledging to help stave off some of the impact.
Dan Ives, an analyst at Wedbush Securities, said the recent weakness represents “growing pains” but likely isn’t a full implosion.
“The last month we have witnessed a sell-off in EV names across the board as the risk-off trade coupled by some sales choppiness seen in China during the month of January has sparked some investors to hit the exit signs in the near-term,” he told clients Thursday.