Tesla’s market value has plunged by an astounding $234 billion this year — that’s considerably more than McDonald’s ($212 billion), Disney ($202 billion), and Cisco ($199 billion) are worth.
Shares of Elon Musk’s EV maker have tumbled 29% in under 10 weeks, closing at their lowest level since May on Wednesday. The result has been a massive decline in Tesla’s market capitalization, from nearly $800 billion to just above $550 billion.
That decline is close to the entire market caps of Netflix ($259 billion) and Coca-Cola ($257 billion), and larger than the entire market value of American Express ($158 billion) and Nike ($148 billion).
It’s also more than twice as big as Starbucks ($104 billion) and more than triple the size of Chipotle ($71 billion), FedEx ($62 billion), and Palantir ($58 billion).
The precipitous decline has fueled a near-$40 billion drop in Musk’s net worth this year to below $190 billion. He’s gone from ranking first on the Bloomberg Billionaires Index to third after LVMH’s Bernard Arnault and Amazon’s Jeff Bezos.
Tesla’s stock is still up nearly five-fold since the start of 2020. However, it’s down about 60% from its peak in November 2021, when Tesla was valued at about $1.2 trillion.
Investors have soured on Tesla stock this year for several reasons. For one, there are signs of flagging demand for EVs among consumers and rental car companies such as Hertz.
Distractions
Tesla has also been forced to slash prices in the face of fierce competition in China from the likes of BYD. Moreover, Musk has blamed the Federal Reserve’s hikes to interest rates for raising people’s monthly car payments.
There’s also concern the tech billionaire is being distracted by everything from fighting on X to filing and fending off lawsuits. Another big worry is that he might shift his AI projects out of Tesla, as he’s threatened. The company hasn’t finished key initiatives like full self-driving technology either.
“Those are the brand levers that gave Tesla its premium,” fund manager Ross Gerber said this week.
“And between Elon’s behavior and the lack of completion to a lot of these projects, Tesla is just coming down to earth to a much more reasonable valuation, to where it kinda should be.”
It’s also worth noting that Tesla is still worth more than 10 times the value of either General Motors ($46 billion) or Ford ($49 billion).
