Great friendship about to fall apart because of money? Elon Musk’s fortune was wiped out in large amounts right after Trump’s inauguration! And the reason will stun you.
Import tariffs could hurt Tesla’s business, causing the electric carmaker’s shares to fall, dragging down Elon Musk’s fortune.
According to the Bloomberg Billionaires Index, Tesla CEO Elon Musk is now worth $402 billion. Although he is still the richest person on the planet, his fortune has dropped by $47 billion since US President Donald Trump took office on January 20.
Previously, Musk was the biggest beneficiary of Trump’s re-election. In 2024, Musk’s fortune increased by nearly $250 billion, mainly due to Tesla’s soaring stock. Investors expect the US electric carmaker to benefit during Trump’s term, thanks to their close relationship. Musk spent $288 million on Trump’s election campaign, helping to bring him back to the White House.
However, the US President’s import tax policy has caused Musk’s fortune to decline. Since the session on January 21, this code has lost nearly 15%.
On February 1, Mr. Trump signed an executive order to impose a 25% tax on goods from Canada and Mexico and a 10% tax on goods from China. On February 3, he announced a delay in imposing tariffs on Mexico and Canada, after reaching an agreement to tighten smuggling and immigration with these two countries. Meanwhile, the tariffs on China are still in effect from February 4, causing Beijing to immediately use similar measures to retaliate, while also tightening the export of many important metals.
Investors are concerned that the tariffs will increase the production costs of Tesla cars and businesses that rely on imported raw materials, such as aluminum and lithium. These are important components in electric vehicle batteries.
China’s retaliatory tariffs on the US have also caused uncertainty. China is a key market for Tesla, which also operates a Gigafactory in Shanghai. The risk of a slowdown in sales in China has weighed on Tesla’s shares.
SpaceX, Musk’s privately held company, has also been under pressure. Investors say the new US import tariffs could impact the aerospace company’s supply chain. SpaceX currently buys many of the components needed for its Starlink satellite internet system from abroad. Therefore, import tariffs will indirectly affect SpaceX’s $350 billion valuation and Musk’s assets.
During the announcement of the fourth quarter 2024 financial report on January 29, Tesla CFO Vaibhav Taneja also expressed concerns about import tariffs. “There are many uncertainties. Over the years, we have tried to localize our supply chain in markets, but we still rely heavily on imported components from around the world. Therefore, the imposition of import tariffs will affect the company’s business and profits.”
Last quarter, Tesla’s profit margin from vehicle sales was just 13.59%, down from 17.05% in the previous quarter. This figure was also lower than analysts’ forecast of 16.2%.
