Elon Musk, the world’s richest man and self-proclaimed “first friend” of President Donald Trump, was hit the hardest on Monday as the stock market reacted to Trump’s tariff announcements. Shares of Musk’s electric car company, Tesla, took a significant hit, with import duties expected to erode the company’s profits.
Key Takeaways
- Tesla’s stock plummeted by 5%, marking the largest percentage drop among 46 U.S. companies valued at $200 billion or more.
- This decline wiped out $11.8 billion from Musk’s net worth, the largest loss of the day for any billionaire.
- Musk, Tesla’s largest shareholder with a 13% stake, saw the stock’s value drop to its lowest point since January 2, dipping by as much as 7.5% during morning trading.
- The broader market was also volatile, with the S&P 500 losing 1.9% before slightly recovering to end the day down by 0.8%. The brief suspension of tariffs on Mexico provided some relief to the markets, tempering the anticipated negative effects.
Why Tariffs Hurt Tesla
Tesla, like many other automakers, finds itself in the crosshairs of Trump’s tariffs, especially due to its reliance on a complex North American supply chain and significant operations in China. Tesla’s CFO, Vaibhav Taneja, warned last week that any tariffs imposed would directly affect the company’s earnings, as it continues to depend on global supply chains for parts and manufacturing.
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Other companies facing similar tariff woes include Nvidia and Apple, both of which generate a substantial portion of their revenue from China.
Key Figures
- $20.9 billion: Tesla’s revenue from China in 2024, which represents more than 21% of the company’s global sales.
Musk’s Reaction
Musk, who has been outspoken about his opposition to tariffs in the past, remained unusually quiet on social media regarding the new tariff-related challenges. His only comment so far was a succinct “Well, okay” in response to an Ontario official’s announcement to cancel a $68 million contract with SpaceX due to the tariffs.
Despite the threat of tariffs and the possibility of losing federal tax credits for electric car buyers, Tesla’s stock has seen remarkable growth since Trump’s election, rising 53% since November.
Forbes Ranking
Musk’s fortune now stands at $410 billion, which is over $150 billion more than it was on Election Day, making him $160 billion wealthier than Amazon founder Jeff Bezos, the second-richest person in the world.
