An unprecedented year: How Elon Musk made a big splash and became the world's richest man in 2021

Text/Eliza Haverstock

Image source: Visual China

It was an extraordinary year for Elon Musk. When the world was just entering 2021, As CEO of Tesla and rocket company SpaceX, Musk was worth about $155 billion at the time. Now, almost a year later, his wealth has reached immeasurable heights. As of Dec. 17, the 50-year-old had a fortune of $245.1 billion — another $90 billion increase since Jan. 1.

In two years, Musk's wealth grew by $200 billion. During 2020, his net worth rose by more than $110 billion, setting a record for the most billionaires tracked by Forbes in a single year.

The main reason is that Tesla's stock price has been climbing, and some people even criticize its stock price as too high. As of Dec. 17, the stock has risen 32 percent so far this year. In early November, Musk's net worth broke through the previously untouched $300 billion mark for the first time, becoming the richest man ever in the world. The company's stock price has fallen nearly 24 percent since peaking on Nov. 4 as Musk dumped millions of shares of Tesla stock and waywardly said on Twitter that he might resign.

Dan Ives, managing director and senior equity analyst at Wedbush, said: "This has been a tough year for Tesla, with competition coming from all sides: chip shortages, stocks going through a historic year. Despite the difficulties, Tesla was able to survive the catastrophe. ”

It was also a historic year for SpaceX. This fall, the airline sent the world's first all-civilian crew into space orbit; the unlisted stock also rose to $100 billion in secondary markets from $74 billion in February. (Musk's stake in SpaceX is worth about $32 million.) In addition, he has done many other things, such as selling six mansions in California, moving into a 400-square-foot house in Texas, and reports of him breaking up with pop singer girlfriend Grimes, and stirring up emotions in the market with outlandish tweets.

Now, let's take a look back at some of Musk's highlights in the crazy 2021:

Regulatory issues with China

Ives said tensions between Musk and Chinese regulators have been hanging over Tesla's stock price in the first half of this year. China is a lucrative market for Tesla, which has a factory in china. According to the company's third-quarter earnings report, the Chinese market accounted for about a quarter of its total revenue in the first nine months of 2021. But as Beijing stepped up its oversight of domestic tech companies this year, it has enacted strict rules on the collection of automotive data and its ability to transfer it abroad. That could hamper Tesla's research and development efforts, as the automaker collects vast amounts of user data from cameras and sensors on its vehicles to perfect its self-driving system. At the Shanghai Auto Show in April, a protester climbed into a Tesla Model 3 and criticized the vehicle's brake problems, after which Tesla also faced scrutiny.

The turning point came in September, when Musk addressed China's annual World Internet Conference, assuring government leaders that Tesla would work to expand in China. Musk said at the meeting: "We are working with regulators to find the best solution for data security. He was referring to a new data center Tesla has built in China that can store "personally identifiable information" locally without having to transfer across borders.

Ives' point is: "If Musk can't manage his relationship with the Chinese government and turn things around, he won't be in an advantageous position, and Tesla won't be where he is today." ”

Chip shortage

Semiconductor chips are key components of new cars, powering the car's infotainment systems, engine management, power braking and steering systems. The supply chain crisis caused a shortage of such chips in 2021, hitting automakers such as General Motors and Ford hard, but Iels said Tesla was largely unaffected.

That's because Tesla has been producing chips in-house for years, using a new material technology called silicon carbide that reduces its reliance on pure silicon. So the shortage didn't hold back Tesla's car production targets, though the company's factory in Fremont, Calif., did shut down for two days in February, for reasons that Musk vaguely called a "shortage of parts."

Tesla's valuation soared to more than $1 trillion

Last October, car rental giant Hertz announced that it would buy 100,000 Tesla cars to grow its car rental business. Hertz reportedly agreed to spend about $4.2 billion on Tesla vehicles. After the news broke, Tesla's market value exceeded $1 trillion for the first time, and Musk's net worth soared to more than $300 billion, making him the richest person ever.

With an estimated net worth of $245.1 billion as of Dec. 17, he remains the richest man in the world, followed by Amazon founder Jeff Bezos, French fashion mogul Bernard Arnold and Microsoft founder Bill Gates.

SpaceX makes history

As Musk's fortune soars to new heights, so does his interstellar career. In mid-September, SpaceX put the world's first all-civilian crew into space orbit, further opening the door to the fledgling space tourism industry. On this journey into space, four astronauts, including fintech billionaire Jared Isaacson, spent three days circumnavigating the globe. It's a crucial step in the space race between billionaires like Musk, Jeff Bezos and British billionaire Richard Branson. While Musk didn't go into space himself this year, his competitors did. In July, Bezos entered space orbit on a BlueOrigin rocket; about a week ago, Branson took part in a similar trip run by his space tourism company, Virgin Galactic. (Musk is also scheduling a future Virgin Galactic space trip, though it's unclear when he'll take off.) ）

On November 6, Musk launched a poll on Twitter, lightly asking fans if he should sell his 10 percent stake in Tesla, causing an uproar in the business world. Musk previously sold Tesla stock twice in 2010 and 2016. Two days later, Musk began selling shares and exercising stock options that would expire in August 2022. As of Dec. 13, he had sold nearly $13 billion worth of Tesla stock; those sales, according to Forbes estimates, could make him pay $8.3 billion in taxes, which could make him the most tax paid in the United States (Musk tweeted that he "will pay more taxes this year than any American in history.").

"Of course, it's also a pry," Ives said of Musk's Twitter vote. "If he suddenly starts selling [Tesla's] stock, the price of that stock will plummet."

Forbes estimates that as of Dec. 13, Musk had amassed about $4.4 billion in cash (after tax) through stock sales.

Bet on Texas

In 2021, Musk moved all his wealth to this "lone star state". As of June, he had sold six of California's seven mansions, and the last remaining one was on sale. So, what is his main residence these days? A "foldable, prefabricated" home of about 400 square feet, about the size of a studio apartment, was built in Boca Chica, Texas, where SpaceX produced the Starship rocket.

Beginning in 2020, Tesla got into a dispute with California lawmakers at its Fremont factory over covid-19 safety regulations. Later, the billionaire announced at its annual shareholder meeting in October 2021 that it plans to move Tesla's headquarters from Palo Alto, California, to Austin, Texas. Musk took a more euphemistic approach to the meeting, saying that California's high housing costs and long commutes were the main reasons for the move. The move was completed in early December, but it's unclear how many Tesla employees will move to Austin or how many new jobs will be created.

Another billionaire who broke up

Musk's personal life has also changed a bit. In late September, it was reported that he and Grimes had broken up. Grimes, an avant-garde rock musician, and Musk dated for about three years — just a few weeks ago, they joined the star-studded Met Gala. In May 2020, the couple welcomed a son named X A-Xii Musk.

New Year?

The holiday season usually prompts billionaires to act charitably, but for this year's world richest man, giving doesn't seem like a priority for him this year. Nearly 10 years ago, Musk signed an oath of giving, pledging to donate at least half of his fortune to charity. But Forbes estimates that Musk has donated less than 1 percent of his wealth to philanthropy so far.

Ives expects more people to start driving electric cars in 2022 and competition to intensify, so Tesla will focus on ramping up capacity at its key factories in Berlin and Austin, Texas. Ives asserts that Tesla's annual production of cars will increase from the current around 1 million to 2 million. By comparison, Toyota, General Motors and Ford all sell more than 4 million vehicles a year, but only a fraction of their car sales are electric.

"We're really seeing an (electric vehicle) arms race," Ives said. "From a battery technology perspective, Tesla is many years ahead ... But it is a target for a lot of people to catch up with. ”

That would make 2022 another interesting year for Musk — if he doesn't cash in on his chips and pull out. On December 9, he tweeted that he was "thinking about quitting his job and becoming a full-time influencer." Of course, in addition to his passion for changing the world, the world's richest man has billions of reasons to stay: Musk's Tesla compensation package includes another 36 million options, worth nearly $32 billion, provided he can satisfy the company's investors and keep Tesla stock rising in a force beyond his control.

Translated by Vivian School Li Yongqiang