<h2 class="wp-block-heading" id="h-topline">Topline</h2>



Equities soared globally Thursday as investors absorbed the Federal Reserve’s jumbo interest rate cut, though stocks’ bond market counterpart appears not to be sold on the Fed cut.



<h2 class="wp-block-heading">Key Facts</h2>



Shortly after market open, the Dow Jones Industrial Average rose 1.3% to a new record of 42,105, the S&amp;P 500 rose 1.6% to its new all-time high of 5,713 and the tech-heavy Nasdaq surged 2.3%, though it remains 4% below its July peak.



The rally comes after a choppy Wednesday trading session as Wall Street reacted to the Fed’s cut in real-time, as the Dow and S&amp;P spiked to all-time highs shortly after the Fed’s afternoon decision,&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2024/09/18/stocks-briefly-touch-record-highs-after-fed-opts-for-bigger-interest-rate-cut/">before</a>&nbsp;all three major U.S. indexes closed in the red, even though the central bank opted for the more stock-friendly route of lowering rates by 50, not 25, basis points.



Stocks abroad jumped as well, as Hong Kong’s Hang Seng and Japan’s Nikkei 225 indexes rallied about 2% apiece and Europe’s Stoxx 600 and the U.K’s FTSE 100 indexes both gained about 1%.



A host of big-name stocks soared Thursday morning, with the likes of Apple, Goldman Sachs, Nvidia and Tesla all up more than 2%, while information technology was the S&amp;P’s best-performing sector, rising about 2.5%.



<h2 class="wp-block-heading">Contra</h2>



The bond market has struggled following the rate cut, as the yield for the benchmark 10-year U.S. Treasury note have gained some 10 basis points from its 3.65% level just after the Fed announcement to Thursday’s 3.75%, the highest yield in two weeks. Higher yields indicate lower bond values, and though lower interest rates typically help bonds, the move&nbsp;<a href="https://www.cnbc.com/2024/09/18/us-treasurys-as-investors-look-to-fed-rate-decision.html" rel="noreferrer noopener" target="_blank">reflects</a>&nbsp;fixed income traders’ concerns the Fed&nbsp;<a href="https://www.cnbc.com/2024/09/18/us-treasurys-as-investors-look-to-fed-rate-decision.html" rel="noreferrer noopener" target="_blank">may have</a>&nbsp;acted too aggressively with inflation still above the historic norm, resulting in higher interest rates over the long run. The 10-year yield is still about 15 basis points below where it was at the end of August.



<h2 class="wp-block-heading">Key Background</h2>



The Fed’s decision to lower the federal funds rate from 5.25% to 5.5% to 4.75% to 5% represented its first cut since March 2020. A cut looked all but guaranteed, but the central bank opted for the friendlier route of a 0.5 percentage-point move&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2024/09/06/stocks-have-worst-week-of-year-as-recession-fears-reemerge/">to address</a>&nbsp;slowdown in the labor market and growing angst about an economic downturn. In a Thursday note to clients, Sevens Report founder Tom Essaye described the stock market’s jolt and drop as a“a sell the news” knee jerk reaction. Lower interest rates are almost always seen as a boon for stocks as lower debt financing boosts corporate profit margins,&nbsp;<a href="https://www.wsj.com/livecoverage/fed-interest-rate-cut-inflation-live-09-18-2024/card/has-the-fed-ever-cut-by-50-basis-points-in-peacetime--k0XHxG5caL952yAjvUrm" rel="noreferrer noopener" target="_blank">though</a>&nbsp;if such a move from the Fed fails to stimulate the economy and predates an extended economic slump, as it did in 2007, it would likely bring pain for investors.



<h2 class="wp-block-heading">Further Reading</h2>



<a href="https://www.forbes.com/sites/dereksaul/2024/09/18/fed-cuts-interest-rates-for-first-time-in-4-years-heres-what-it-means-for-you/" target="_blank" rel="noreferrer noopener">ForbesFed Cuts Interest Rates For First Time In 4 Years: Here’s What It Means For YouBy&nbsp;Derek Saul</a>



<a href="https://www.forbes.com/sites/dereksaul/2024/09/18/stocks-briefly-touch-record-highs-after-fed-opts-for-bigger-interest-rate-cut/" target="_blank" rel="noreferrer noopener">ForbesStocks Briefly Hit Record Highs After Fed Opts For Big Interest Rate Cut—But Close NegativeBy&nbsp;Derek Saul</a>

Markets Open After Falling More 800 Points On Tuesday

S&P 500, Dow Rise More Than 1% To New Highs In Delayed Rate Cut Rally

A decision by a Delaware judge late Tuesday afternoon has multibillion-dollar implications regarding Musk’s fortune.



Elon Musk ceded the title of world’s richest person to Frenchman Bernard Arnault of luxury conglomerate LVMH Tuesday evening, after a&nbsp;<a href="https://www.forbes.com/sites/antoniopequenoiv/2024/01/30/judge-voids-elon-musks-56-billion-pay-package-from-tesla/?sh=7ee4eb102756">Delaware judge</a>&nbsp;voided a hefty package of performance-based Tesla options&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2021/05/06/elon-musk-made-billions-in-2020-every-other-ceo-made-millions/?sh=39b88bdd6f93">awarded to Musk in 2018</a>. Those shares had been worth more than $50 billion.&nbsp;Forbes&nbsp;estimates that Musk is now worth $184.5 billion. He now trails Arnault (estimated net worth: $210.8 billion) but remains ahead of the world’s third richest person, Amazon’s Jeff Bezos ($179 billion).



In her ruling, Delaware judge Kathaleen McCormick determined that Musk and his co-defendants, Tesla and certain of its board members, failed to prove that the process underlying the award of “the largest potential compensation opportunity ever observed in public markets” was fair due to conflicts of interest and Musk’s “control” over the board. Musk’s options were worth $50.9 billion (net of exercise cost) at Tuesday’s stock market close. Because of the ruling, he won’t be able to exercise or sell them. Given the high level of uncertainty about what comes next–including an appeal of the ruling,&nbsp;Forbes&nbsp;has discounted Musk’s options by 50%, enough to knock his net worth down by $25.5 billion after the decision.



“[The ruling] will certainly be appealed and there is some chance of reversal or a different remedy,” says UCLA law professor Jim Park. “Chancellor McCormick is well regarded and known as careful, so I think there’s a good chance her decision will get some deference from the Delaware Supreme Court. On the other hand, perhaps the Supreme Court will worry that the decision will send a negative message to the business community and will thus reduce the award.”



There is also the possibility that Tesla could just grant Musk another pay package with a more rigorous process designed to withstand legal scrutiny. After all, Tesla shareholders, whose stock has appreciated more than sevenfold since 2018, haven’t exactly celebrated the decision by the Delaware court. Shares of Tesla were trading down 0.8% at 2:30 p.m. eastern time on Wednesday.



“If the pay package is struck down, Musk will demand another — and he&#8217;ll get it,” says Michigan law professor Adam Pritchard. “But [it’s] very hard to say how different that would be from this package.”



Musk had been clamoring for even more Tesla shares prior to the Delaware decision. In an X post on January 15 he wrote, “I am uncomfortable growing Tesla to be a leader in AI &amp; robotics without having ~25% voting control.” If upheld on appeal, the judge&#8217;s decision to void Musk&#8217;s options pay package would drop his stake in Tesla from 22% to 13%.

GERMANY-AUTOMOBILE-TESLA-MUSK

Elon Musk No Longer World’s Richest After Judge Voids $51 Billion Pay Package

Tesla, the fastest-growing U.S. automaker, reported record deliveries of its electric vehicles in 2021’s final quarter and its best-ever total sales volume, getting 936,172 of its namesake cars and crossovers to global customers.&nbsp;



The company said in a&nbsp;<a href="https://ir.tesla.com/press-release/tesla-q4-2021-vehicle-production-deliveries" target="_blank" rel="noreferrer noopener">statement</a>&nbsp;Sunday it delivered 308,600 units, led mainly by growth in Model Y hatchbacks and Model 3 sedans, with pricey Model S and Model X crossovers, which sell for about $100,000 each, accounting for a much smaller portion. Production for the quarter at Tesla’s plants in Fremont, California, and Shanghai totaled 305,840 units and 930,422 for the year.&nbsp;



The company doesn’t break down its sales by region, but China has been key to its accelerating volume growth, both in deliveries to customers there and as an export base to Europe and other markets. The quarterly delivery tally, up about 70% from a year ago, beat expectations of equity analysts including Deutsche Bank’s Emmanuel Rosner, who estimated deliveries would reach 282,000 units. Tesla’s full-year deliveries rose 87% from 2021.



Though the company fell just short of delivering 1 million vehicles last year, CEO Elon Musk has said he thinks Tesla can sell 20 million EVs annually by the end of the decade. That would be unprecedented since the world’s biggest automakers, including Toyota and Volkswagen, only sell about 10 million units worldwide annually. Certainly, Tesla should continue to see substantial growth throughout 2022 as it prepares to open new plants in Germany and Texas that will boost its total production capacity amid rising consumer interest in EVs.



“Musk &amp; Co. have navigated the chip supply shortages better than any automaker globally over the last six months, which is why Tesla is in a clear position of strength heading into 2022 with an inflection point year ahead,” Dan Ives, an equity analyst with Wedbush, said in a research note last week in which he raised his target price on the shares to as much as $1800. “The linchpin to the overall bull thesis on Tesla remains China, which we estimate will represent 40% of deliveries for the EV maker in 2022.”



The company is to release revenue and net income results in a few weeks.&nbsp;



Tesla shares fell 1.3% to $1,056.78 on Friday, the final trading day of 2021.



By Alan Ohnsman, Forbes Staff

Elon Musk, CEO of SpaceX and chairman of Tesla Motors at Tesla’s headquarters in San Carlos Tuesday Oct. 24, 3008.  Silicon Valley icon Musk became a billionaire founding PayPal, but he’s out to do something even more important – help humanity reach beyon

Tesla Says It Delivered Record 936,172 Electric Vehicles In 2021

One is Elon Musk (duh), and the other is&nbsp;JB Straubel. But there were three more—and there’s a cautionary tale in why they aren’t billionaires too.



Electric car upstart Tesla gathered reporters at a Santa Monica Airport hangar on a July afternoon in 2006 to unveil its battery-powered roadster, an audacious, $100,000 two-seater for which few automotive experts saw much hope of success. The company’s brash, tech-savvy CEO, Martin Eberhard, declared that Silicon Valley ingenuity would teach Detroit’s auto giants how to make compelling zero-emission cars. Tesla’s first effort, a modified Lotus Elise chassis packed with 7,000 tiny lithium-ion cells, was a high-end concept that would soon be followed by a lower-priced family sedan, the chief executive said. The vision he laid out that day ultimately came to pass, but not with him in charge.&nbsp;



Tesla this month became the first carmaker to hit an astonishing $1 trillion valuation, but the CEO who introduced the company to the press 15 years ago didn’t become synonymous with the brand. And he certainly didn’t wind up as the wealthiest person in history. That’s Elon Musk, of course, Tesla’s earliest investor and the company’s current CEO. Musk was also present at Tesla’s debut in 2006, but he assumed a lower profile that day, mainly arguing for the need to shift cars away from gasoline power as quickly as possible.&nbsp;



Tesla’s original CEO, Eberhard, and another early executive named Marc Tarpenning, who in 2003 dreamed up the idea of naming the company’s vehicles in honor of inventor Nikola Tesla, are Tesla’s original shareholders — the first men to claim ownership of the upstart brand that would go on to shake up the Detroit establishment. But neither of them retained enough Tesla stock to achieve billionaire status, much less Musk’s current net worth that&nbsp;Forbes&nbsp;estimates at $282 billion as of Nov. 10. It was Musk’s seed capital—the result of an early payday investing in payments processor PayPal—that turned Eberhard and Tarpenning’s vision into a reality. Ultimately, it also set Musk on a path to take full control of Tesla by steadily raising his ownership stake in a series of nine funding rounds prior to the company’s 2010 IPO, each of which further diluted the stakes of Eberhard and Tarpenning. Even today Musk’s stake grows as he continues to receive quarterly stock awards, in lieu of salary, worth billions of dollars.



In an interview, Eberhard says he retains a “relatively small” stake in the carmaker, while declining to be specific.&nbsp; “I sold a good chunk of my stock a long time ago,” Eberhard, 61, says from his home in Washington state’s San Juan Islands. “People somehow have the idea that I was a zillionaire when I started Tesla. I was not.”&nbsp;



Had Eberhard been wealthier from the sale of the Rocket eBook, an early handheld electronic reader he and Tarpenning created in the late 1990s, there would have been no need to seek initial funding from Musk, he says.



Musk has often said he doesn’t care about wealth and sold his Los Angeles mansions last year to live in a humble, prefab box house on his SpaceX campus in Boca Chica, Texas. Nevertheless, he keeps amassing wealth at a remarkable pace. That’s because of an early ownership stake of nearly 20% in the company and a long-term compensation plan announced in 2018 that rewards him with billions of dollars of additional Tesla stock every time it hits quarterly performance targets based on financial and valuation metrics. (He’s also preparing to sell 10% of his stake, worth about $15 billion as of Nov. 9, to avoid a massive tax hit as some long-term options mature.)



“I own no Tesla stock now. Of course I could not imagine a $1 trillion valuation!”&nbsp;Tesla cofounder Ian Wright



Eberhard, meanwhile, sold much of his stake after being pushed out of Tesla in 2007, before the Roadster’s launch. He sued Musk in 2009 over his ouster and for slander, before settling the case for undisclosed terms. As part of a settlement, he dropped opposition to Musk, former Tesla Chief Technology Officer JB Straubel and Ian Wright, an early engineer with the company, also being called cofounders, in addition to himself and Tarpenning.&nbsp;



“When I got kicked out of Tesla I had no money—I mean I really had no money,” Eberhard says. “Worse than that, I had no possibility of employment for about a year” because of a restrictive intellectual property agreement with Tesla, he says. “I did not participate in any investment rounds after I left.”&nbsp;



Eberhard won’t provide details of his Tesla stake, but he confirms he’s not a billionaire. Tarpenning, these days a partner at Spero Ventures, a Silicon Valley venture capital firm, has said he, too, still owns Tesla stock, but he isn’t listed among its top shareholders. He didn’t respond to inquiries from&nbsp;Forbes.



Of the five official cofounders, only Straubel, who left Tesla in 2019, is likely to have attained billionaire status from his holdings. His stake may be worth about $1.3 billion, assuming he retains a significant portion of Tesla stock held when he left. Straubel, currently CEO and cofounder of battery recycling startup Redwood Materials, declined to comment on the matter. Engineer Wright, who joined Eberhard and Tarpenning a few months after they created Tesla, left in 2004 to start another EV company. He sold his stake years ago.



“I own no Tesla stock now,” he tells&nbsp;Forbes. “Of course I could not imagine a $1 trillion valuation!”&nbsp;



Beyond making Musk the world’s richest person, the company that’s become synonymous with a global car revolution has also enriched investors and board members including venture capitalist Ira Ehrenpreis and Oracle’s Larry Ellison, as well as Elon’s younger brother, Kimbal, and countless investors inspired by the potential for a clean energy future.&nbsp;&nbsp;



<hr class="wp-block-separator"/>



<blockquote class="wp-block-quote is-style-large is-layout-flow wp-block-quote-is-layout-flow">“Whatever my opinion is about Musk, I am still super happy to see the electric car revolution—that we after all started—I&#8217;d like to see that revolution winning.”Martin Eberhard</blockquote>



<hr class="wp-block-separator"/>



For all the company’s success in the electric vehicle space and newfound financial stability, as well as the non-stop attention Musk seeks and generates, Tesla’s earliest days were marked by a high degree of management and strategic turbulence that left a single cofounder in control. Other tech-oriented giants that attained trillion-dollar valuations, such as Microsoft and Alphabet, created several billionaires among their cofounders, though Musk’s singular financial gains aren’t so unusual.&nbsp;



“While it does seem true that other notable technology firms minted multiple financial winners, a somewhat similar dynamic at Tesla played out at Apple,” says David Hsu, professor of management at the University of Pennsylvania’s Wharton School. Cofounder Steve Jobs’ Apple stake was worth an estimated $2 billion at the time of his death in 2011 and Steve Wozniak’s wealth is an estimated $100 million, though Ronald Wayne, Apple’s little-known third cofounder, sold his stake early for $800, Hsu says. Musk’s rewards today simply flow from a risky early bet that’s paid off big for him.



“It’s not only ownership stakes of cofounders; we could also point to cases of missing out by investors, including angel and VC investors,” Hsu said. “At the time Musk invested in the Series A round, and for a considerable amount of time afterward, there was a lot of uncertainty about the ability of the firm to execute its bold vision. Some might argue that sentiment is still somewhat true today.”&nbsp;



Citing a “non-disparagement” clause that was part of the 2009 settlement, Eberhard declines to elaborate on his views about Musk these days. By contrast, Musk himself has shown far less restraint. He described Eberhard as “literally the worst person I’ve ever worked with” in a January 2020 interview for the&nbsp;<a href="https://www.youtube.com/watch?v=NxmO_QuD4Do" target="_blank" rel="noreferrer noopener">Third Row Tesla podcast</a>, hosted by Musk fans.&nbsp;&nbsp;



Still, the company’s original CEO, who owned “somewhat less” than 5% when he left Tesla, says he’s not unhappy these days, despite not profiting more from its surge.&nbsp;



“The valuation is what it is. What I&#8217;m happy about is the success of the company. It&#8217;s crucial that we get off of fossil fuels and Tesla has been the major driver of that, which is what we had hoped for from the beginning,” Eberhard says.



“Whatever my opinion is about Musk, I am still super happy to see the electric car revolution—that we after all started—I&#8217;d like to see that revolution winning. It has to.”&nbsp;



By Alan Ohnsman, Forbes Staff

GettyImages-760016751

Tesla Had 5 Founders. Why Did Only Two Get Really Rich?

<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



The stock market reached new record highs again on Monday thanks to a positive third-quarter earnings season so far, with investors largely optimistic about upcoming results from Big Tech companies.



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



The Dow Jones Industrial Average rose nearly 0.2% on Monday, while the S&amp;P 500 gained 0.5% and the tech-heavy Nasdaq Composite jumped 0.9%.



Both the Dow and S&amp;P 500 closed at new record highs as the stock market’s winning streak continued on the back of positive third-quarter earnings.



Of the 117 companies in the S&amp;P 500 that have reported earnings so far, some 84% have posted results that were above expectations, according to data from Refinitiv.



While earnings season has been upbeat so far, investors are looking ahead to earnings from major technology companies this week, including Facebook, Alphabet, Microsoft, Amazon and Apple.



Shares of Facebook, which reports after the market close on Monday, fell earlier in the day before rising over 1% in afternoon trading; The company has been under pressure recently following the release of the ‘<a href="https://www.forbes.com/sites/alisondurkee/2021/10/25/here-are-the-biggest-facebook-papers-charges-zuckerberg-caves-to-communist-government-and-lets-celebrities-break-the-rules-more/">Facebook Papers</a>’ whistleblower documents.



Tesla stock, meanwhile, surged 12% to a new all-time high on Monday—bringing the company’s market value to more than $1 trillion—after Hertz&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2021/10/25/tesla-amasses-1-trillion-in-market-value-after-hertz-places-biggest-electric-vehicle-order-ever/?sh=6366c038156e">announced</a>&nbsp;it placed the company’s biggest order ever and bought 100,000 Tesla cars.&nbsp;



<h2 class="wp-block-heading" id="h-big-number-26-billion">BIG NUMBER: $26 BILLION</h2>



That’s how much Elon Musk’s net worth&nbsp;<a href="https://www.forbes.com/sites/elizahaverstock/2021/10/25/elon-musk-is-nearly-14-billion-richer-after-hertz-order-pushes-tesla-stock-to-record-levels/?sh=5d56b6ef7248">jumped</a>&nbsp;on Monday as Tesla shares skyrocketed. With a net worth of $255.8 billion, according to&nbsp;Forbes’ estimates, the Tesla cofounder and CEO is the richest person on the planet—worth more than any billionaire&nbsp;Forbes&nbsp;has ever tracked.



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND:</h2>



The major averages have all registered strong gains so far this month, with the Dow and S&amp;P both up more than 5%, while the Nasdaq has gained more than 4%.



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE:</h2>



Despite supply-chain concerns and labor shortages, the “rising tide of earnings is lifting all the boats and adding fuel to the bull market fire,” says Anu Gaggar, global investment strategist at Commonwealth Financial Network.



<h2 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR:</h2>



“There could be more gains to come in the final two months of the year,” predicts Ryan Detrick, chief market strategist for LPL Financial. “Seasonal tailwinds, improving market internals, and clear signs of a peak in the Delta variant all provide potential fuel for equities heading into year-end.”



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING:</h2>



<a href="https://www.forbes.com/sites/jonathanponciano/2021/10/25/tesla-amasses-1-trillion-in-market-value-after-hertz-places-biggest-electric-vehicle-order-ever/?sh=6366c038156e">Tesla Hits $1 Trillion In Market Value After Hertz Places Biggest Electric Vehicle Order Ever</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sergeiklebnikov/2021/10/25/pinterest-shares-plummet-12-after-paypal-ends-rumors-of-a-45-billion-deal/">Pinterest Shares Plummet 12% After PayPal Ends Rumors Of A $45 Billion Deal</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sergeiklebnikov/2021/10/22/heres-why-facebook-twitter-and-google-shares-are-sinking-even-as-the-market-sits-near-record-highs/">Here’s Why Facebook, Twitter And Google Shares Are Sinking Even As The Market Sits Near Record Highs</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/alisondurkee/2021/10/25/here-are-the-biggest-facebook-papers-charges-zuckerberg-caves-to-communist-government-and-lets-celebrities-break-the-rules-more/">Here Are The Biggest ‘Facebook Papers’ Charges: Zuckerberg Caves To Communist Government And Lets Celebrities Break The Rules, More</a> (Forbes)



By Sergei Klebnikov, Forbes Staff

Elon Musk Betting On Tesla IPO To Fund Electric Car Maker

Stocks Close At Record Highs After Tesla Hits $1 Trillion In Market Value

Tesla, born in Silicon Valley in the early 2000s, is moving its headquarters to Texas where the electric-car maker’s billionaire CEO Elon Musk already lives, though it will continue building vehicles in the San Francisco Bay Area.&nbsp;



Musk made the announcement Thursday evening at the company’s annual shareholders meeting, held at Tesla’s nearly complete Texas Gigafactory near Austin. He didn’t specify the precise timing of when the current headquarters in Palo Alto would close, though the move is not entirely unexpected.&nbsp;



“To be clear though, we will be continuing to expand our activities in California,” Musk said. “This is not a matter of Tesla leaving California. Our intention is to actually increase output from Fremont and from a gig in Nevada by 50%.”



Though California remains Tesla’s biggest market in the U.S. and largest source of vehicle production, Musk has soured on the state in recent years, most notably after health officials in Alameda County, where the company&#8217;s Fremont factory is located, set restrictions to protect worker safety and health during the early days of the Covid-19 pandemic in 2020. Musk, whose views have grown more libertarian over the years, moved to Austin in 2020.



California Governor Gavin Newsom, a&nbsp;<a href="https://www.latimes.com/politics/la-pol-ca-gavin-newsom-tax-returns-20170509-htmlstory.html" target="_blank" rel="noreferrer noopener">Tesla owner</a>, had&nbsp;<a href="https://www.cnbc.com/2020/05/19/gavin-newsom-not-worried-about-elon-musk-moving-tesla-from-california.html" target="_blank" rel="noreferrer noopener">told CNBC</a>&nbsp;in May 2020 interview that he wasn’t “concerned about Elon leaving anytime soon” after Musk initially threatened to do so.



Yet Musk has increasingly bristled at strict rules in California while warming to the appeal of cheaper, less-regulated Texas. In September, after the state passed a&nbsp;<a href="https://www.forbes.com/sites/alisondurkee/2021/09/02/biden-vows-action-against-texas-abortion-ban-with-whole-of-government-effort/?sh=2426ab856acf">strict abortion law</a>, and following its tighter rules on voting and loosening of gun regulations, Texas Gov. Greg Abbott said the billionaire entrepreneur “<a href="https://www.forbes.com/sites/alanohnsman/2021/09/02/elon-musk-likes-the-social-policies-in-texas-according-to-governor-amid-abortion-furor/?sh=2ec74fea6649">likes the social policies</a>” there.



“California is the birthplace of innovation, the 5th largest economy in the world and home to the biggest ideas and companies on the planet—that success is not despite our progressive policies, but because of them,” said Erin Mellon, a spokesperson for Newsom.



“We stand up for our workers, public health, and a woman’s right to choose. These are California’s fundamental values, and we’ll continue creating more jobs than any other state, outpacing the nation’s economic recovery, and maintaining the lowest COVID-19 case rates in the country,” she said.



Tesla’s headquarters move is the first by an automaker in the state since Toyota similarly announced plans to move its North American headquarters from suburban Los Angeles to suburban Dallas.&nbsp;Electric vehicle startups Lucid Motors, Fisker Inc. and Rivian currently are based in California.



<div class="wp-block-image"><figure class="aligncenter"><img decoding="async" src="https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fspecials-images.forbesimg.com%2Fimageserve%2F615f80929b080124edd0d297%2FTesla-leaving-california-for-texas%2F0x0.jpg%3FcropX1%3D78%26cropX2%3D1521%26cropY1%3D0%26cropY2%3D752" alt="Tesla-leaving-california-for-texas"/><figcaption>Tesla&#8217;s Texas Gigafactory is to begin vehicle production by the end of 2021.&nbsp;TESLA</figcaption></figure></div>



“We believe this was a smart strategic move for Tesla as the company is aggressively building out its Austin footprint and over time with Cybertruck and more Model 3/Y production Musk is now doubling down on its Texas footprint with capacity ramping into 2022,” Daniel Ives, an equity analyst for Wedbush Securities, said in a research note. “While Fremont will continue to be a key for Tesla around Model 3 production, we believe this was the first step towards Tesla making Austin its domestic and global foundational location over the coming decade with its recent frustration with California officials likely accelerating this move.”



Among the issues Musk cited were the company’s need for additional space, expensive home prices in the Bay Area and long commutes for workers.&nbsp;



“We’re here in Austin and our factory is like five minutes from the airport, 15 minutes from downtown,” Musk said. “We&#8217;re going to create an ecological paradise here on the Colorado River. It’s gonna be great.”&nbsp;&nbsp;



Tesla shares rose 1.4% in Nasdaq trading on Thursday to $793.61.



By Alan Ohnsman, Forbes Staff

gettyimages-490597722-594×594

Musk Is Moving Tesla’s Headquarters From California To Texas

It’s been a rollercoaster year among the very wealthiest, with Musk, Jeff Bezos and LVMH’s Bernard Arnault all vying for the number one spot.



Athree-way race for the title of wealthiest person in the world intensified Thursday as&nbsp;<a href="https://www.forbes.com/profile/elon-musk/">Elon Musk</a>, worth an estimated $177.4 billion at the day’s end, overtook French luxury magnate&nbsp;<a href="https://www.forbes.com/profile/bernard-arnault/">Bernard Arnault</a>&nbsp;for second place. Arnault, who held pole position to start the week, got nearly $21 billion poorer over the past two days as LVMH shares tumbled 12.6%. That led to Amazon founder&nbsp;<a href="https://www.forbes.com/profile/jeff-bezos/">Jeff Bezos</a>&nbsp;reclaiming the top spot with a fortune estimated at $185.5 billion.



It’s been a rollercoaster year atop the billionaire ranks. Since January, the three have periodically jockeyed for the lead on&nbsp;Forbes’&nbsp;<a href="https://www.forbes.com/real-time-billionaires/">real-time tracker</a>&nbsp;of the world’s richest people, with each coming out on top—and losing the title—multiple times over the past eight months.



The constant shuffling is unusual. Over the first three decades after&nbsp;Forbes&nbsp;began tracking billionaires’ net worths in 1987, only six people held the title of world’s richest person. In the early years, two Japanese real estate moguls—Yoshiaki Tsutsumi and Taikichiro Mori—topped the list, until&nbsp;<a href="https://www.forbes.com/profile/bill-gates/">Bill Gates</a>&nbsp;came along in the late 1990s. From 1997 to 2017, Gates dominated the list, save for a single year when&nbsp;<a href="https://www.forbes.com/profile/warren-buffett/">Warren Buffett</a>&nbsp;took the top spot (2008) and a three-year stint when Mexico’s&nbsp;<a href="https://www.forbes.com/profile/carlos-slim-helu/">Carlos Slim Helu</a>&nbsp;wrested the title (2010 through 2013). (Spanish retailer&nbsp;<a href="https://www.forbes.com/profile/amancio-ortega/">Amancio Ortega</a>&nbsp;also grabbed the top spot for a few hours in 2015, and a couple days in 2016.)&nbsp;



<hr class="wp-block-separator"/>



<h3 class="wp-block-heading" id="h-race-to-the-top">RACE TO THE TOP</h3>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="750" src="https://cms.forbesafrica.com/wp-content/uploads/2021/08/Screenshot-2021-08-20-at-13.39.52-1024x750.png" alt="" class="wp-image-52223" srcset="https://cms.forbesafrica.com/wp-content/uploads/2021/08/Screenshot-2021-08-20-at-13.39.52-1024x750.png 1024w, https://cms.forbesafrica.com/wp-content/uploads/2021/08/Screenshot-2021-08-20-at-13.39.52-300x220.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2021/08/Screenshot-2021-08-20-at-13.39.52-768x563.png 768w, https://cms.forbesafrica.com/wp-content/uploads/2021/08/Screenshot-2021-08-20-at-13.39.52-1536x1125.png 1536w, https://cms.forbesafrica.com/wp-content/uploads/2021/08/Screenshot-2021-08-20-at-13.39.52.png 1540w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption>Forbes.com</figcaption></figure>



In recent years, the longtime Microsoft chief, has found himself firmly outside the top three thanks to gifts of stock to his Bill and Melinda Gates Foundation, transfers of at least $5 billion worth of shares in public companies to his ex-wife&nbsp;<a href="https://www.forbes.com/profile/melinda-french-gates/">Melinda French Gates</a>—and the meteoric rise of Bezos, Musk and Arnault.



Since early 2017—when Gates topped the World’s Billionaires list with an $86 billion net worth—Bezos has added more than $110 billion to his fortune on the back of skyrocketing Amazon stock, Arnault has ridden LVMH shares’ 225% climb to more than quadruple his net worth and Musk has had the steepest climb in history, gaining more than $150 billion in four years as Tesla has become the most valuable carmaker on the planet.



<hr class="wp-block-separator"/>



<h2 class="wp-block-heading" id="h-jeff-bezos">Jeff Bezos</h2>



<h3 class="wp-block-heading" id="h-net-worth-185-2-billion">Net worth: $185.2 billion</h3>



<h3 class="wp-block-heading" id="h-gain-in-past-12-months-6-6-billion">Gain in past 12 months: $6.6 billion</h3>



<h3 class="wp-block-heading" id="h-weeks-this-year-ended-at-no-1-26">Weeks this year ended at No. 1: 26</h3>



Bezos, the longtime Amazon CEO and now executive chairman, has been the world’s richest for most of 2021. Bezos began the year in first place and, after briefly dropping to No. 2, he&nbsp;<a href="https://www.forbes.com/sites/lisettevoytko/2021/01/16/jeff-bezos-once-again-the-worlds-richest-person-after-rollercoaster-week/">regained the No.1 spot</a>&nbsp;for about four months from mid-January until May. Bezos&nbsp;<a href="https://www.forbes.com/sites/giacomotognini/2021/06/10/after-two-weeks-at-no-2-jeff-bezos-is-once-again-the-richest-person-in-the-world/">returned to the top spot</a>&nbsp;on June 10, and maintained the lead for 50 days before losing footing when Amazon announced disappointing quarterly earnings in late July, which wiped $13.9 billion from his net worth in a single day. Even as Amazon’s stock continues to falter, an even shakier performance by the stock of Arnault’s LVMH helped Bezos to&nbsp;<a href="https://www.forbes.com/sites/kenrickcai/2021/08/18/jeff-bezos-again-richest-person-in-world/">once again become the richest person</a>&nbsp;on Wednesday.



<hr class="wp-block-separator"/>



<h2 class="wp-block-heading" id="h-elon-musk">Elon Musk</h2>



<h3 class="wp-block-heading" id="h-net-worth-177-1-billion">Net worth: $177.1 billion</h3>



<h3 class="wp-block-heading" id="h-gain-in-past-12-months-110-9-billion">Gain in past 12 months: $110.9 billion</h3>



<h3 class="wp-block-heading" id="h-weeks-this-year-ended-at-no-1-1">Weeks this year ended at No. 1: 1</h3>



Musk’s fortune has grown by more than $100 billion in one year, thanks to an extraordinary rise in the stock price of electric vehicle maker Tesla. After a brief drop at the start of the Covid-19 pandemic, shares rocketed in subsequent months. On January 8, 2021—with Tesla shares up more than 1,000% from the pandemic-period low—Musk&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2021/01/08/elon-musk-is-now-the-richest-person-in-the-world-officially-surpassing-jeff-bezos/">first became</a>&nbsp;the world’s richest person, overtaking Bezos. For about a week, the two&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2021/01/11/elon-musk-falls-to-second-richest-person-in-the-world-after-his-fortune-drops-nearly-14-billion-in-one-day/">traded places</a>&nbsp;on a&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2021/01/12/elon-musk-is-back-at-no-1-richest-person-in-the-world-after-tesla-stock-rebounds/">near-daily</a>&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2021/01/13/elon-musk-falls-to-worlds-second-richest-person/">basis</a>, but as Tesla stock began to fall, Bezos solidified his position once again. Musk, meanwhile, was overtaken by Arnault and dropped down to third place for months beginning in April.



<hr class="wp-block-separator"/>



<h2 class="wp-block-heading" id="h-bernard-arnault">Bernard&nbsp;Arnault</h2>



<h3 class="wp-block-heading" id="h-net-worth-173-2-billion">Net worth: $173.2 billion</h3>



<h3 class="wp-block-heading" id="h-gain-in-past-12-months-61-9-billion">Gain in past 12 months: $61.9 billion</h3>



<h3 class="wp-block-heading" id="h-weeks-this-year-ended-at-no-1-6">Weeks this year ended at No. 1: 6</h3>



Through <a href="https://www.forbes.com/sites/susanadams/2019/10/31/the-100-billion-man-how-bernard-arnault-stitched-together-the-worlds-third-biggest-fortune-with-louis-vuitton-dior-and-77-other-brandsand-why-hes-not-done-yet/">predatory instinct</a>, Arnault has built a luxury empire that is the largest company in Europe by market capitalization. His LVMH owns dozens of brands, including fashion mainstay Louis Vuitton, alcohol producer Hennessy and cosmetics retailer Sephora. Earlier this year, LVMH completed a $15.8 billion acquisition of jeweler Tiffany &amp; Co., victorious after a contentious saga that began with an unsolicited takeover bid. Arnault <a href="https://www.forbes.com/sites/giacomotognini/2021/05/21/french-luxury-tycoon-bernard-arnault-is-now-tied-with-jeff-bezos-for-richest-person-in-the-world/">first became the world’s richest person</a> in May and, after <a href="https://www.forbes.com/sites/daviddawkins/2021/05/24/bernard-arnault-becomes-worlds-richest-person-as-lvmh-stock-rises/">some days</a> of <a href="https://www.forbes.com/sites/giacomotognini/2021/05/27/bernard-arnault-becomes-the-richest-person-in-the-world-for-the-third-time-this-week/">jostling</a>, he managed to hold Bezos off for about two weeks. When shares in Amazon fell in late July, Arnault <a href="https://www.forbes.com/sites/hanktucker/2021/07/30/bernard-arnault-once-again-the-worlds-richest-person-after-jeff-bezos-loses-nearly-14-billion-in-one-day/">reclaimed the number one position</a> and held on for most of August, before threats of Chinese wealth redistribution tanked European luxury stocks and caused Arnault’s fortune to plunge by more than $20 billion this week.



By Kenrick Cai, Forbes Staff

Elon Musk Visits Site Of New Tesla Gigafactory In Germany

Elon Musk Is Now The Second Richest Person In The World

Unexploded World War II bombs, protests over trees, water and animal habitats, union scrutiny and a labor review have hindered Tesla&#8217;s Berlin Gigafactory plans — but the biggest hurdle may come in the form of strict German regulations.



By Alan Ohnsman, Forbes Staff &amp; Sofia Lotto Persio, Forbes Staff



Tesla had hit its stride in November 2019 when&nbsp;<a href="https://www.forbes.com/sites/alanohnsman/2019/11/12/willkommen-elon-musk-says-next-tesla-gigafactory-will-be-in-germany/?sh=163614f68b03">Elon Musk announced a massive electric car plant in Germany</a>, the heart of European auto-manufacturing. His Silicon Valley company was riding a booming share price fueled by the start of a string of quarterly profits and, more importantly, its Shanghai Gigafactory was coming together at an astonishing pace: It was about to begin making Model 3s just 11 months after the groundbreaking.&nbsp;



Emboldened by that success and cash from an&nbsp;<a href="https://www.ft.com/content/7a3c8d9a-57bb-11e9-a3db-1fe89bedc16e" target="_blank" rel="noreferrer noopener">emissions credit sales deal with Fiat Chrysler</a>&nbsp;to fund it, the carmaker’s billionaire CEO and cofounder aimed to replicate it in leafy Grünheide, Germany, site of the future $4.9 billion (€4 billion) plant 24 miles east of Berlin. “Giga Berlin will come together at an impossible-seeming speed,” Musk&nbsp;<a href="https://twitter.com/elonmusk/status/1287598172508958721?s=20" target="_blank" rel="noreferrer noopener">tweeted</a>&nbsp;in July 2020. It hasn&#8217;t worked out that way.



Physical construction is nearing completion, but the plant may not start making Model Ys until 2022, months after an initial target of July 1–or even later, pending environmental approval from the state of Brandenburg. Tesla has had a much harder road than Musk envisioned. The company had to remove unexploded World War II shells at the site. It’s faced stiff opposition from environmentalists over chopping down hundreds of acres of trees, the plant’s voracious water needs and the disruption of bat and animal habitats. The plant is being <a href="https://www.reuters.com/business/autos-transportation/top-union-sets-sights-works-council-teslas-german-gigafactory-2021-05-07/" target="_blank" rel="noreferrer noopener">eyed for organization by IG Metall</a>, Germany’s biggest labor union. The project is also under scrutiny for a possible <a href="https://finance.yahoo.com/news/authorities-open-labour-probe-german-182635315.html" target="_blank" rel="noreferrer noopener">violation of labor laws during construction</a> and may be fined for installing sewer pipes without permission.



“Although things looked good regarding the Tesla facility up to a few weeks ago, a different reality can lie behind a facade,” says Matthias Schimdt, an independent auto analyst based in Berlin. He sees the project unfolding much like the capital city’s new airport, which was built quickly but saw its opening delayed nearly a decade as it struggled to win final approval to operate from German authorities. “This mustn&#8217;t be a carbon copy situation for Tesla, which is located just a stone&#8217;s throw from the new airport that eventually came into service last year,” Schimdt says. “It just goes to highlight that things aren&#8217;t easy in ‘bureaucratic hell’ Germany.”



Delays fulfilling Musk’s quest to tap the lucrative European market complicate the electric-car impresario’s efforts to stay ahead of mounting competition in battery-powered vehicles, especially from German automakers like Volkswagen, Daimler and BMW. Tesla may be the world’s most valuable carmaker, but it’s far from the biggest, having just a fraction of the production capacity of German, U.S., Japanese and Korean auto giants, delivering just under 500,000 vehicles last year versus VW’s 9.3 million. And while the company’s plant in China was a critical addition to its long-time production base in Fremont, California, Tesla can’t meet Musk’s long-held goal of producing millions of electric vehicles annually without Giga Berlin and a second U.S. auto-assembly plant under construction near Austin, Texas.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“It just goes to highlight that things aren&#8217;t easy in &#8216;bureaucratic hell&#8217; Germany.”<cite>Auto analyst Matthias Schmidt </cite></blockquote>



“Coming off the incredibly fast build of the Shanghai factory, they might have miscalculated how quickly they could get Berlin up and running–perhaps not fully accounting for the significant differences in regulatory and environmental standards,” says Garrett Nelson, senior equity analyst at CFRA Research. Construction also happened amid logistical and supply chain headaches related to the Covid-19 pandemic, he says. “Tesla is doing everything possible to stay on track with its guidance, but the reality is that first production could be delayed until early 2022.”



The company hasn’t confirmed reports that&nbsp;<a href="https://www.marketwatch.com/story/teslas-berlin-gigafactory-to-be-delayed-another-6-months-report-11619992994" target="_blank" rel="noreferrer noopener">Musk agreed to a six-month delay</a>&nbsp;for the plant a few days after reassuring investors and analysts on Tesla’s April 26 results call that “both Texas and Berlin are progressing well.”



“We expect to have initial limited production from those factories this year and volume production from Texas and Berlin next year,” Musk said on the call. But during a surprise visit to the Grünheide construction site&nbsp;<a href="https://www.reuters.com/business/elon-musk-visits-teslas-delayed-european-gigafactory-state-minister-says-2021-05-17/" target="_blank" rel="noreferrer noopener">Monday he told reporters</a>&nbsp;&#8220;I think there could be less bureaucracy. That would be better.&#8221;



&#8220;There should be some kind of active process for removal of rules. Otherwise, over time, the rules will just accumulate and you get more and more rules until eventually you can&#8217;t do anything,&#8221; Musk said, according to Reuters.



Analysts have already adjusted their models for Tesla to reflect the slowdown. “Giga Berlin is an early 2022 story,” says Dan Ives, an equity analyst for Wedbush. “Given the red tape in Europe this timeline remains bumpy but needs to be running by March 2022–otherwise production issues would be hampered.” 



Germany’s role as a global auto powerhouse, with its strong parts supply base and reputation for high-quality engineering, lured Musk over other countries he eyed as sites for Tesla’s European plant. (He&nbsp;<a href="https://www.autoexpress.co.uk/tesla/108395/tesla-gigafactory-europe-to-be-built-in-germany-not-uk-as-elon-musk-blames-brexit" target="_blank" rel="noreferrer noopener">considered the U.K.</a>, but uncertainties related to Brexit ultimately proved too big a gamble.) Aside from selling vehicles in Germany, Tesla planted its flag there in 2016 with the&nbsp;<a href="https://www.forbes.com/sites/alanohnsman/2016/11/08/tesla-buying-germanys-grohmann-engineering-to-automate-accelerate-production/?sh=100c31523354">acquisition of Grohmann Engineering</a>, rebranded Tesla Grohmann Automation. The chance to square off against the country’s auto giants–which are also now aggressively focused on closing the electric vehicle gap with Tesla–on their home turf added to its appeal. For Economics Minister&nbsp;<a href="https://www.bloomberg.com/news/articles/2020-09-02/germany-promises-musk-whatever-he-needs-for-tesla-berlin-plant" target="_blank" rel="noreferrer noopener">Peter Altmaier</a>, Tesla’s decision to “build a highly modern factory for electric cars in Germany is further proof of the attractiveness of Germany as an automotive manufacturing base,” he said when the project was announced in 2019.



Given the headaches he’s run into, Musk may be “wondering whether that ‘Made in Germany’ stamp on the underbody of each model leaving the factory was worth it,” says analyst Schmidt.



Grünheide, in the state of Brandenburg, sits in what was East Germany, which&nbsp;<a href="https://www.pewresearch.org/fact-tank/2019/11/06/east-germany-has-narrowed-economic-gap-with-west-germany-since-fall-of-communism-but-still-lags/ft_19-11-01_eastwestgermanyecon_3/" target="_blank" rel="noreferrer noopener">remains poorer than the rest of the country</a>&nbsp;since reunification 30 years ago. Local politicians were thrilled at the prospect of a project that would bring thousands of jobs and prestige to the area. “The whole region can look forward to new opportunities of development now thanks to the Tesla project which has really put Grünheide on the map globally,”&nbsp;<a href="https://www.gruenheide-mark.de/m/politik/person/31026/pamela-eichmann" target="_blank" rel="noreferrer noopener">Pamela Eichmann</a>, chair of the Grünheide (Mark) local council, told&nbsp;<a href="https://www.dw.com/en/locals-views-on-german-tesla-plant-irreconcilable-as-production-start-faces-delay/a-57405731" target="_blank" rel="noreferrer noopener">Deutsche Welle</a>&nbsp;this month.



While the town’s leaders might be rooting for the factory, plenty of others are not. The plant occupies a space between the A10 highway and Fangschleuse railway station, but it’s also a few miles from the Löcknitztal nature reserve that’s had protected status since 1984 and been registered as a fauna-flora-habitat area (FFH) since 1998. Grünheide literally translates as “Green Heath” from German.



So when one of the first steps to ready the 300-hectare site for Musk’s gigafactory was&nbsp;<a href="https://twitter.com/joergstb/status/1227992011699052545?s=20" target="_blank" rel="noreferrer noopener">chopping down about 430 acres of forest</a>, it wasn’t the best start–particularly for a company whose motto is “accelerating the world’s transition to sustainable energy.”



Environmentalists temporarily blocked tree-cutting operations in early 2020, but Tesla <a href="https://www.cnbc.com/2020/02/21/tesla-gets-german-court-approval-to-chop-down-trees-for-gigafactory-4.html" target="_blank" rel="noreferrer noopener">won court approval,</a> initially to remove 92 hectares of trees, and then 82.8 hectares more. Musk downplayed the quality of the trees he cut down, tweeting in January 2020 that “this is not a natural forest—it was planted for use as cardboard &amp; only a small part will be used for” the Berlin gigafactory. The company has also pledged to <a href="https://www.teslarati.com/tesla-gigafactory-berlin-reforestation-video/" target="_blank" rel="noreferrer noopener">plant three times</a> as many trees as it cut down, though <a href="https://www.zmescience.com/science/agriculture-science/cutting-down-trees-and-planting-new-ones-is-wrecking-the-soil/#:~:text=Continuously%20cutting%20down%20forests%20and,crucial%20minerals%2C%20new%20analysis%20shows.&amp;text=It's%20always%20a%20good%20idea,you%20cut%20some%20old%20ones." target="_blank" rel="noreferrer noopener">scientists generally warn</a> that planting new trees is not as effective as a carbon-capture strategy as maintaining existing ones. Local environmental groups were also concerned about the disruption deforestation would <a href="https://www.loecknitztal.de/home/stellungnahme-zu-tesla/" target="_blank" rel="noreferrer noopener">cause to animals</a> inhabiting the forest. Site preparation in Grünheide <a href="https://www.cleanenergywire.org/news/tesla-searches-bats-and-resettles-ants-preparation-german-gigafactory" target="_blank" rel="noreferrer noopener">included relocating bats and ants</a> living in the forest and removal of <a href="https://www.dw.com/en/germany-defuses-wwii-bombs-at-tesla-gigafactory-site/a-52157407" target="_blank" rel="noreferrer noopener">seven unexploded bombs dropped by the U.S. during World War II</a>.



The amount of water the plant will use and its impact on the region also concern local environmentalists, “because most of the factory ground belongs to a drinking water protection area and very close to the factory are two nature protection areas which are very sensitive to changes in the ground water level,” says Christiane Schroeder, managing director at the Brandenburg branch of NABU (Nature and Biodiversity Conservation Union), one of the oldest and largest environmental non-profits in Germany, and a leading opponent of the Gigafactory.



Making matters worse, Tesla ran afoul of the district’s water authority, which discovered water pipes that had been installed without its permission. Tesla was allowed to continue construction work on April 12 after a brief suspension, but still faces a potential fine for the infraction, the Brandenburg Ministry for Agriculture, Environment and Climate Protection tells&nbsp;Forbes. Separately, the State Office for Occupational Safety and other agencies are&nbsp;<a href="https://finance.yahoo.com/news/authorities-open-labour-probe-german-182635315.html" target="_blank" rel="noreferrer noopener">reported to be investigating whether Tesla violated rules</a>&nbsp;for minimum wages, working hours, conditions and worker housing during plant construction.



Ultimately, the plant won’t be permitted to begin production until it has secured all necessary permits, a process that can grind on, Schmidt says.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Very close to the factory are two nature protection areas which are very sensitive to changes in the ground water level”<cite>Environmentalist Christiane Schroeder </cite></blockquote>



IG Metall, Germany’s biggest labor union with 2.2 million members, represents workers at Tesla’s engineering unit there and initially&nbsp;<a href="https://www.reuters.com/article/uk-tesla-gigafactory-germany-idUKKBN1XM2M0" target="_blank" rel="noreferrer noopener">welcomed the company’s gigafactory plan</a>. It had previously attempted to organize Tesla’s Grohmann unit, but the company boosted salaries there to block the effort. The union intends to set up a works council and organize future employees at Giga Berlin, union chief Joerg Hofmann&nbsp;<a href="https://www.reuters.com/business/autos-transportation/top-union-sets-sights-works-council-teslas-german-gigafactory-2021-05-07/" target="_blank" rel="noreferrer noopener">told Reuters this month</a>.&nbsp;



That’s anathema to anti-union Musk. In California he’s worked to keep the United Auto Workers out of Tesla’s Fremont plant–a union factory in its previous incarnations as both a Toyota-General Motors joint venture and GM facility. Tesla was found to have&nbsp;<a href="https://www.nlrb.gov/case/32-CA-220777" target="_blank" rel="noreferrer noopener">engaged in unfair labor practices by the National Labor Relations Board</a>, including efforts to interrogate workers it suspected were part of the union push at Fremont. That 2019 ruling was&nbsp;<a href="https://www.washingtonpost.com/technology/2021/03/25/tesla-nlrb-ruling/" target="_blank" rel="noreferrer noopener">upheld in March 2021</a>&nbsp;and Musk was ordered to delete a&nbsp;<a href="https://twitter.com/elonmusk/status/998454539941367808?s=20" target="_blank" rel="noreferrer noopener">2018 tweet</a>&nbsp;discouraging Fremont workers from joining the UAW. (He has yet to do so.)



For now, IG Metall is waiting for operational details for the Grünheide facility, including whether Tesla intends to follow the round-the-clock, three-shift approach used in the U.S. and China, and adhere to German wage and working condition rules. “We give Tesla the benefit of the doubt regarding what the labor standards will look like in the long run,” says Birgit Dietze, IG Metall’s regional head. 



Long-time China auto analyst (and Tesla owner) Michael Dunne, whose ZoZo Go consultancy works with auto and parts makers across Asia, thinks Tesla’s exceptionally fast start in China led it to move too quickly in Germany. “I imagine Tesla thinking something like, ‘China is rife with regulations, licenses and government intervention, but we sorted that out in less than a year. Bring on Berlin!” he says. Powerful government allies eased the way for Tesla in China, that’s not an option in Germany, Dunne says. “One’s a democracy, the other one’s not. It’s rule by whim in China. Unlike in Germany, there&#8217;s no court of public opinion.”



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“I imagine Tesla thinking something like, ‘China is rife with regulations, licenses and government intervention, but we sorted that out in less than a year. Bring on Berlin!”<cite>Zozo Go founder Michael Dunne </cite></blockquote>



In Germany, groups like Schroeder’s NABU have a right to make their opposition known. The environmental activist tells&nbsp;Forbes&nbsp;the group has discussed their concerns with Tesla, but that the company has only been receptive to some of the issues raised, the easiest to accommodate. “I think Elon Musk is more into his own business and into new technology than really in preventing climate change,” she says. “He sees a great opportunity to sell his inventions as ‘part of the solution’ but doesn’t realize that he creates new problems as a side effect.”&nbsp;



In retrospect, Musk might have been better off building the plant in adjacent EU countries, says analyst Schmidt. “Perhaps they are slowly starting to ask themselves if they really should have looked just a few kilometers further east toward the Polish or Czech borders, where things would have have been more freewheeling,” he says. “There’s good reason Porsche decided to manufacture the Cayenne SUV–one of their most profitable models–in Slovakia!” &nbsp;

The Rules Even Elon Musk Can’t Break

TOPLINE Billionaire Tesla CEO Elon Musk stirred up the cryptocurrency market with his Twitter account again Sunday when he appeared to hint Tesla would cast out its bitcoin holdings, a move that saw the cryptocurrency plunge.



<h3 class="wp-block-heading" id="h-key-facts">KEY FACTS</h3>



When a Twitter user&nbsp;<a href="https://twitter.com/CryptoWhale/status/1393981793813078017?s=20" target="_blank" rel="noreferrer noopener">speculated</a>&nbsp;Sunday Musk would ditch bitcoin over the hate the billionaire had received after announcing Tesla would&nbsp;<a href="https://www.forbes.com/sites/joewalsh/2021/05/12/tesla-will-stop-accepting-bitcoin-as-payment-due-to-environmental-worries-musk-says/">no longer accept the cryptocurrency</a>&nbsp;as payment last week, Musk replied with one word: “<a href="https://twitter.com/elonmusk/status/1394001894809427971?s=20" target="_blank" rel="noreferrer noopener">Indeed</a>.”&nbsp;



The vague message was enough to push cryptocurrency investors to sell off their bitcoin, and the price dipped nearly 8.5% down to $44,395 a coin Sunday.



Cryptocurrency is notoriously volatile, but Sunday’s dip was bitcoin’s biggest slump in more than three months and represented one of its biggest drops in value since the price first began to rapidly ramp up in January.&nbsp;



Last week, Musk said Tesla would no longer accept the cryptocurrency until bitcoin, which requires colossal amounts of electricity to work with, shifts to&nbsp;<a href="https://twitter.com/elonmusk/status/1392602041025843203" target="_blank" rel="noreferrer noopener">more sustainable energy use</a>,



Musk said at the time Tesla would not sell off the bitcoin it already had.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Indeed&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1394001894809427971?ref_src=twsrc%5Etfw">May 16, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<h2 class="wp-block-heading">BIG NUMBER</h2>



$1.5 billion. That’s how much Musk spent on buying bitcoin just&nbsp;<a href="https://www.cnbc.com/2021/02/08/tesla-buys-1point5-billion-in-bitcoin.html" target="_blank" rel="noreferrer noopener">three months ago</a>, in preparation for using the cryptocurrency at Tesla.



<h2 class="wp-block-heading">SURPRISING FACT</h2>



Running bitcoin uses&nbsp;<a href="https://www.bbc.com/news/technology-56012952" target="_blank" rel="noreferrer noopener">more electricity</a>&nbsp;than some countries, according to a University of Cambridge study published in February. Researchers said the cryptocurrency burns through 121.36 terawatt-hours annually, roughly the equivalent of used by countries like&nbsp;<a href="https://www.bbc.com/news/technology-56012952" target="_blank" rel="noreferrer noopener">Argentina and Norway</a>.



<h3 class="wp-block-heading">KEY BACKGROUND</h3>



Just two months ago,&nbsp;<a href="https://www.forbes.com/sites/roberthart/2021/03/24/bitcoin-surges-as-elon-musk-says-it-can-be-used-to-buy-teslas/?sh=4e37216b3cb2">bitcoin prices soared</a>&nbsp;when Musk announced Tesla would accept the cryptocurrency as payment for Tesla’s pricey electric vehicles. Musk’s quick reversal last week to suspend Tesla bitcoin payments and the cryptocurrency’s loss of value soon after angered many bitcoin investors, who said the billionaire was&nbsp;<a href="https://twitter.com/PeterMcCormack/status/1393971202738302986?s=20" target="_blank" rel="noreferrer noopener">misinformed</a>&nbsp;about bitcoin’s energy consumption. Musk has&nbsp;<a href="https://twitter.com/elonmusk/status/1393995872413888518?s=20" target="_blank" rel="noreferrer noopener">bickered</a>&nbsp;with and&nbsp;<a href="https://twitter.com/elonmusk/status/1393246529498976258?s=20" target="_blank" rel="noreferrer noopener">made fun of</a>&nbsp;the bitter investors on Twitter in recent days.



<h3 class="wp-block-heading">TANGENT</h3>



Musk is no stranger to playing the cryptocurrency market with his tweets. His current cryptocurrency of choice, <a href="https://www.forbes.com/sites/roberthart/2021/05/14/dogecoin-stages-a-comeback-amid-cryptos-300-billion-crash-soaring-30-as-elon-musk-and-coinbase-signal-confidence/?sh=258f1752672f">dogecoin</a>, is regularly boosted by the eccentric CEO’s Twitter memes and public enthusiasm. 



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">👀&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1383103246470811652?ref_src=twsrc%5Etfw">April 16, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<h3 class="wp-block-heading">FURTHER READING</h3>



<a href="https://www.forbes.com/sites/joewalsh/2021/05/12/tesla-will-stop-accepting-bitcoin-as-payment-due-to-environmental-worries-musk-says/?sh=39f2924f6e9f">Tesla Will Stop Accepting Bitcoin As Payment Due To Environmental Worries, Musk Says</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/alanohnsman/2021/05/12/elon-musk-says-tesla-stops-accepting-bitcoin-for-car-purchases-due-to-carbon-energy-use/?sh=34e39d386f85">Bitcoin Tanks After Elon Musk Says Tesla Stops Accepting It Due To Carbon Energy Use</a> (Forbes)



by Carlie Porterfield, Forbes Staff

gettyimages-1130598362-594×594

Elon Musk Sends Bitcoin Tumbling With A One-Word Tweet

TOPLINE Billionaire Elon Musk has approached officials of a Texas county where SpaceX has a private launch site and rocket production facility about incorporating a new city to be called Starbase, officials said.



<h3 class="wp-block-heading" id="h-key-facts">KEY FACTS</h3>



<ul class="wp-block-list"><li>Cameron County Judge Eddie Treviño <a href="https://www.cameroncounty.us/spacex-incorporation-inquiry/" target="_blank" rel="noreferrer noopener">said</a> Tuesday Elon Musk’s private spaceflight company, SpaceX, reached out about Musk’s interest in incorporating Boca Chica Village, where SpaceX is building its Starship rocket. </li></ul>



<ul class="wp-block-list"><li>Treviño indicated the county is <a href="https://www.cameroncounty.us/spacex-incorporation-inquiry/" target="_blank" rel="noreferrer noopener">open to incorporation</a>, but that the process must abide by all state incorporation statutes and said the county will process any petitions in line with the law.</li></ul>



<ul class="wp-block-list"><li>Musk said Tuesday he’s hoping to incorporate “an area <a href="https://twitter.com/elonmusk/status/1366859619461570561?s=20" target="_blank" rel="noreferrer noopener">much larger </a>than Boca Chica.” </li></ul>



<ul class="wp-block-list"><li>Musk previously posted <a href="https://twitter.com/elonmusk/status/1366848696298561536?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1366848696298561536%7Ctwgr%5E%7Ctwcon%5Es1_c10&amp;ref_url=https%3A%2F%2Fembedly.forbes.com%2Fwidgets%2Fmedia.html%3Ftype%3Dtext2Fhtmlkey%3D3ce26dc7e3454db5820ba084d28b4935schema%3Dtwitterurl%3Dhttps3A%2F%2Ftwitter.com%2Felonmusk%2Fstatus%2F1366848696298561536image%3Dhttps3A%2F%2Fi.embed.ly%2F1%2Fimage3Furl3Dhttps253A252F252Fabs.twimg.com252Ferrors252Flogo46x38.png26key3D3ce26dc7e3454db5820ba084d28b4935" target="_blank" rel="noreferrer noopener">a mysterious statement</a> about creating a Texas city called Starbase on Tuesday, and later added it would be dog-friendly and led by <a href="https://twitter.com/elonmusk/status/1366857632372256770?s=20" target="_blank" rel="noreferrer noopener">the Doge</a>, a reference to the <a href="https://www.forbes.com/sites/roberthart/2021/02/04/i-am-become-meme-destroyer-of-shorts-dogecoin-soars-again-as-elon-musk-returns-from-self-imposed-twitter-exile/">Dogecoin</a> meme cryptocurrency he endorsed last month.</li></ul>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Creating the city of Starbase, Texas&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1366848696298561536?ref_src=twsrc%5Etfw">March 2, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<h3 class="wp-block-heading">KEY BACKGROUND</h3>



Musk, who&nbsp;Forbes&nbsp;estimates is worth nearly&nbsp;<a href="https://www.forbes.com/profile/elon-musk/?sh=4bcf1dae7999">$164 billion</a>, is expanding his footprint in the Lone Star State. SpaceX also has a site in McGregor, a city halfway between Austin and Dallas, and this week, a job posting revealed the company is looking to build&nbsp;<a href="https://www.forbes.com/sites/carlieporterfield/2021/03/02/elon-musks-spacex-to-open-a-factory-in-austin-job-posting-reveals/?sh=4720c17d383b">a manufacturing facility</a>&nbsp;in Austin. The Boring Company began hiring in the Austin area in November, and the city was named the location of&nbsp;<a href="https://www.forbes.com/sites/rachelsandler/2020/07/22/teslas-next-gigafactory-will-be-in-austin-texas-and-musk-says-it-will-be-stunning/">Tesla’s next gigafactory</a>. Musk confirmed in December he was&nbsp;<a href="https://www.forbes.com/sites/elanagross/2020/12/08/elon-musk-confirms-hes-moving-from-california-to-texas/?sh=41c0c6124948">moving to Texas</a>&nbsp;from California.&nbsp;



<h3 class="wp-block-heading">FURTHER READING</h3>



<a href="https://www.forbes.com/sites/carlieporterfield/2021/03/02/elon-musks-spacex-to-open-a-factory-in-austin-job-posting-reveals/?sh=4720c17d383b">Elon Musk’s SpaceX To Open A Factory In Austin, Job Posting Reveals</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/elanagross/2020/12/08/elon-musk-confirms-hes-moving-from-california-to-texas/?sh=41c0c6124948">Elon Musk Confirms He&#8217;s Moving From California To Texas</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/carlieporterfield/2020/12/07/elon-musk-reportedly-relocated-his-foundation-to-texas-fueling-rumors-hell-move-there-too/?sh=2fd905c94f2a">Elon Musk Reportedly Relocated His Foundation To Texas, Fueling Rumors He’ll Move There Too</a> (Forbes)



By Carlie Porterfield, Forbes Staff

Billionaire Elon Musk Receives Axel Springer Award

Elon Musk Wants To Set Up A City Named Starbase Around His Texas Rocket Launch Site

Billionaire Elon Musk’s rocket company SpaceX&nbsp;<a href="https://www.cnbc.com/2021/02/16/elon-musks-spacex-raised-850-million-at-419point99-a-share.html" target="_blank" rel="noreferrer noopener">reportedly</a>&nbsp;completed an $850 million fundraising round last week, as it looks to raise capital for its ambitious Starlink and Starship projects.&nbsp;



News of the funding was&nbsp;<a href="https://www.cnbc.com/2021/02/16/elon-musks-spacex-raised-850-million-at-419point99-a-share.html" target="_blank" rel="noreferrer noopener">first reported</a>&nbsp;by CNBC, which said that the private company will now have a valuation of around $74 billion, citing people familiar with the financing. SpaceX did not immediately respond to&nbsp;Forbes’ request for comment.



The company raised new funds at $419.99 per share, per CNBC. That price is just a cent below $420 per share, potentially a reference to Elon Musk’s notorious&nbsp;<a href="https://twitter.com/elonmusk/status/1026872652290379776" target="_blank" rel="noreferrer noopener">Twitter post</a>&nbsp;in 2018, when he joked that he would take Tesla private at $420 with “funding secured.”



Musk—who is the world’s second-richest person, behind Amazon CEO Jeff Bezos—owned roughly 48% of SpaceX prior to this latest funding round, according to&nbsp;Forbes’ calculations.&nbsp;



It is not immediately clear if Musk’s ownership was diluted by the new round. If he managed to hold onto all 48%, his stake would now be worth about $32 billion—up from roughly $20 billion previously, according to&nbsp;Forbes’ estimates. That would boost Musk’s net worth by $12 billion—but that’s still not enough for him to pass Bezos and retake the spot of the richest person on the planet.&nbsp;



He is <a href="https://www.forbes.com/profile/elon-musk/?sh=298803137999">worth</a> $173.4 billion as of market close on Tuesday, February 16, according to Forbes. Most of his fortune lies in his stake in electric car company Tesla, shares of which have more than quadrupled in value over the past 12 months. Musk also serves as CEO of Tesla.



SpaceX was last valued at $46 billion in an August 2020 fundraising round. But some Wall Street banks had put that value even higher: In October, a Morgan Stanley analyst gave SpaceX a&nbsp;<a href="https://www.forbes.com/sites/daviddawkins/2020/10/23/elon-musks-spacex-gets-bullish-100-billion-valuation-from-morgan-stanley-double-what-investors-said-it-was-worth-in-august/?sh=75aaf6b86e79">bullish valuation of $100 billion</a>—double what investors said it was worth in August.&nbsp;



The latest fundraising round comes in the midst of two capital-intensive projects, Starship and Starlink. Starship is the company’s long-term spacecraft project, intended to eventually replace SpaceX’s existing Falcon 9 rockets and Dragon spacecraft. The aim of the project is to develop a fully-reusable launch vehicle that is expected to take cargo, and eventually passengers, into space at a lower cost than other existing spacecraft.&nbsp;



Beyond&nbsp;<a href="https://www.forbes.com/sites/alexknapp/2020/05/25/elon-musks-first-astronaut-launch-is-one-giant-leap-for-space-capitalism/#3df32c382b49">successfully launching</a>&nbsp;U.S. astronauts into space in May of last year, SpaceX said in 2020 that it was seeing “extraordinary demand” for its Starlink satellite broadband service. The project aims to build an interconnected network of about 12,000 small satellites in low Earth orbit. So far, early tests have shown broadbands speeds capable of playing online video games and streaming movies, but the service faces criticism over its&nbsp;<a href="https://www.wtva.com/content/news/State-leader-questions-high-cost-for-Starlink-internet-service-573706251.html" target="_blank" rel="noreferrer noopener">cost</a>&nbsp;and the company’s ability to&nbsp;<a href="https://arstechnica.com/tech-policy/2021/02/isps-step-up-fight-against-spacex-tell-fcc-that-starlink-will-be-too-slow/" target="_blank" rel="noreferrer noopener">scale capacity</a>.



In addition to raising money for its large-scale projects, SpaceX also completed a secondary transaction in which SpaceX insiders and investors were able to sell an additional $750 million worth of their shares, <a href="https://www.cnbc.com/2021/02/16/elon-musks-spacex-raised-850-million-at-419point99-a-share.html" target="_blank" rel="noreferrer noopener">according to</a> CNBC.



By Sergei Klebnikov, Forbes Staff

Elon Musk’s SpaceX Now Worth $74 Billion After Latest Fundraising Round: Report

Despite seeing his net worth skyrocket in recent months—and a&nbsp;<a href="https://www.bloomberg.com/news/articles/2021-01-06/musk-close-to-surpassing-bezos-as-world-s-richest-person#:~:text=Elon%20Musk%2C%20the%20outspoken%20entrepreneur,the%20world's%20500%20wealthiest%20people." target="_blank" rel="noreferrer noopener">report</a>&nbsp;from Bloomberg on Wednesday that he’s now the world’s richest person—<a href="https://www.forbes.com/profile/elon-musk/?list=rtb/">Elon Musk</a>&nbsp;remains the second-richest person in the world, according to&nbsp;Forbes’ estimates.



Shares of Musk’s electric-vehicle maker Tesla&nbsp;<a href="https://www.forbes.com/companies/tesla" target="_blank" rel="noreferrer noopener">TSLA</a>&nbsp;<a href="https://www.forbes.com/companies/tesla">+6.9%</a>&nbsp;rose by 7% as of 2:30 p.m. EST on Thursday, pushing Musk’s net worth up by $9.8 billion, to $175.2 billion. That makes him $22 billion richer than the planet’s third-wealthiest person, French luxury tycoon&nbsp;<a href="https://www.forbes.com/profile/bernard-arnault/?list=rtb/">Bernard Arnault</a>, but still $11 billion behind the world’s number one, Amazon&nbsp;<a href="https://www.forbes.com/companies/amazon" target="_blank" rel="noreferrer noopener">AMZN</a>&nbsp;<a href="https://www.forbes.com/companies/amazon">+1.8%</a>&nbsp;CEO&nbsp;<a href="https://www.forbes.com/profile/jeff-bezos/?list=rtb/">Jeff Bezos</a>.&nbsp;Forbes&nbsp;estimates that Bezos has a net worth of $186.8 billion.



Musk’s net worth has grown at an astronomical clip over the past year. He has added nearly $150 billion to his fortune since March 2020, when he was&nbsp;<a href="https://www.forbes.com/billionaires/">worth $24.6 billion</a>. Much of that increase comes from Tesla’s skyrocketing share price, which rose more than 720% in 2020. It has gained another 10% so far over the first week of 2021.&nbsp;



As Tesla’s stock soared ahead of its inclusion in the S&amp;P 500 Index on December 21, Musk surpassed Facebook&nbsp;<a href="https://www.forbes.com/companies/facebook" target="_blank" rel="noreferrer noopener">FB</a>&nbsp;<a href="https://www.forbes.com/companies/facebook">+1.9%</a>&nbsp;CEO&nbsp;<a href="https://www.forbes.com/profile/mark-zuckerberg/?list=rtb/">Mark Zuckerberg</a>&nbsp;(who is worth $98.2 billion today) to become the world’s fourth-richest person in early November, then leapfrogged Microsoft&nbsp;<a href="https://www.forbes.com/companies/microsoft" target="_blank" rel="noreferrer noopener">MSFT</a>&nbsp;<a href="https://www.forbes.com/companies/microsoft">+3%</a>&nbsp;cofounder&nbsp;<a href="https://www.forbes.com/profile/bill-gates/?list=rtb/">Bill Gates</a>&nbsp;(worth $121.9 billion today) for the number three spot.



Musk owns around 21% of Tesla’s shares, plus a stake in private rocket company SpaceX. Tesla stock still sits at record highs, now trading for over $800 per share. The company’s $765 billion market cap makes it by far the most valuable car company in the world.



-By Sergei Klebnikov, Forbes Staff

No, Elon Musk Is Not The Richest Person In The World—Yet

Topline In an effort to beef up the firm&#8217;s balance sheet and capitalize on massive stock gains this year, electric-carmaker Tesla said on Tuesday it will raise up to $5 billion in a new stock offering, the second time since September that the firm&#8217;s raised cash by issuing new shares.



<h4 class="wp-block-heading" id="h-key-facts">KEY FACTS</h4>



In a Tuesday regulatory&nbsp;<a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000119312520312194/d60067d8k.htm" target="_blank" rel="noreferrer noopener">filing</a>, Tesla said it could issue up to 7.8 million new shares based on Monday&#8217;s closing stock price, increasing the number of shares outstanding to roughly 955.6 million.



The firm said it plans to use offering proceeds to &#8220;further strengthen&#8221; its balance sheet by investing in high-grade bonds, cash equivalents or U.S. government securities.



Tesla shares are down 1% on Tuesday following the announcement, but still up an eye-popping 660% this year alone; meanwhile, the tech-heavy Nasdaq has climbed 37%.



The firm previously <a href="https://www.sec.gov/Archives/edgar/data/1318605/000119312520236699/d931870d424b5.htm" target="_blank" rel="noreferrer noopener">announced</a> another $5 billion capital raise on September 1 after year-to-date stock gains of roughly 450%.



<h4 class="wp-block-heading">CRUCIAL QUOTE&nbsp;</h4>



&#8220;Now in a clear position of strength and out of the red ink with major factory build-outs on the horizon (in Austin and Berlin), Tesla is raising enough capital to get the balance sheet and capital structure to further firm up its growing cash position and slowly get out of its debt situation,&#8221; Wedbush analysts Daniel Ives and Strecker Backe wrote on Tuesday.



<h4 class="wp-block-heading">KEY BACKGROUND</h4>



Founded in 2003, Tesla went public on the Nasdaq exchange in June 2010 at an offering price of $17 per share. Shares have rallied this year amid a broader market boom for high-flying tech stocks, and much of the surge has happened in just the past month after S&amp;P Global announced in mid-November that it will&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/17/elon-musk-fortune-surges-5-billion-tesla-joining-sp-500/">add Tesla to the S&amp;P 500</a>&nbsp;Index on December 21, a move that should drive up demand for Tesla shares given the number of index and mutual funds tracking the S&amp;P.



<h4 class="wp-block-heading">BIG NUMBER</h4>



$600 billion. That&#8217;s how much Tesla topped in market value on Monday, making it nearly three times more valuable than the world&#8217;s second-most valuable automaker, Toyota. This year&#8217;s stock surge has boosted Musk&#8217;s <a href="https://www.forbes.com/profile/elon-musk/">net worth</a> to roughly $141 billion, Forbes estimates. 



<h2 class="wp-block-heading">WHAT WE DON&#8217;T KNOW</h2>



S&amp;P Global hasn&#8217;t yet announced which firm Tesla will replace on the S&amp;P 500.



<h2 class="wp-block-heading">FURTHER READING</h2>



<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/17/elon-musk-fortune-surges-5-billion-tesla-joining-sp-500/">Elon Musk’s Fortune Surges $6 Billion After S&amp;P 500 Makes Tesla Its Largest-Ever Addition</a> (Forbes)



By <a href="https://www.forbes.com/sites/jonathanponciano/"></a>Jonathan Ponciano, Forbes Staff

Elon Musk Reveals Tesla Model Y Crossover; To Start At $39,000

Tesla Is Raising Another $5 Billion To Capitalize On Stock’s Near-700% Surge This Year

Thanks to Tesla’s roaring stock,&nbsp;<a href="https://www.forbes.com/profile/elon-musk/?sh=676b23917999">Elon Musk’s</a>&nbsp;net worth has nearly quadrupled during the Covid-19 pandemic, racing from $24.6 billion in mid-March to a current $126.8 billion by&nbsp;Forbes’&nbsp;estimate. But despite this meteoric rise, the 49-year-old is not the world’s second-richest person&nbsp;yet.&nbsp;



Forbes currently has Musk in the No. 3 spot, behind Jeff Bezos, who reigns supreme at $182.6 billion, and French luxury goods tycoon Bernard Arnault, worth $140.6 billion. With the surge in the value of Tesla shares this week, Musk surpassed Bill Gates, who is now in fourth place, worth $119.4 billion



Musk owns 21% of Tesla but has pledged more than half his stake as collateral for personal loans;&nbsp;Forbes&nbsp;applies a 25% discount to his shareholding to account for the loans. Musk’s&nbsp;net worth estimate includes $25 billion worth of options that he was awarded&nbsp;since May as part of&nbsp; a historic 12-tranche compensation plan.&nbsp;



Musk became eligible for the fourth tranche in late October after Tesla exceeded the cumulative EBITDA requirement, but Tesla has yet to confirm in public filings that it has certified the results. A representative for Musk did not reply to a request for comment from&nbsp;Forbes&nbsp;in time for publication. Until the receipt of the fourth tranche is confirmed,&nbsp;Forbes&nbsp;is only counting some 25 million options from the package towards Musk’s net worth.



Musk also owns an estimated 48% of SpaceX, the rocket company that recently made its first launch with astronauts on board. Investors valued SpaceX at $46 billion in August. After applying&nbsp;Forbes’&nbsp;10% private company discount, Musk’s SpaceX stake is worth just under $20 billion.



Tesla’s shares have risen 36% since Tuesday November 17 when S&amp;P Global announced that the electric car company would be added to the S&amp;P 500 index on December 21. The addition to the index means that more mutual funds tied to the S&amp;P 500 will buy Tesla stock.&nbsp;



With a current market capitalization of $525 billion, Tesla is worth far more than Toyota ($198 billion) and GM ($66 billion) combined. In the first three quarters of 2020, Tesla delivered 318,000 cars, a small fraction of the number produced by the world’s larger automakers.



“I really couldn’t care less,” Musk emailed Forbes about his net worth in July. “These numbers rise and fall, but what really matters is making great products that people love.”



-By Hayley C. Cuccinello, Forbes Staff

Key Speakers At The Satellite 2020 Conference

No, Elon Musk Is Not The Second Richest Person In The World — Here’s Why

After more than a decade of annual losses, Tesla&nbsp;<a href="https://www.forbes.com/companies/tesla" target="_blank" rel="noreferrer noopener">TSLA</a>&nbsp;<a href="https://www.forbes.com/companies/tesla">+0.2%</a>&nbsp;extended its profitability streak to five consecutive quarters, a company first, as increased sales of Model 3 and Model Y electric vehicles and pollution credits boosted net income to $331 million, its highest to date.



The Palo Alto, California-based company led by billionaire entrepreneur&nbsp;<a href="https://www.forbes.com/profile/elon-musk/">Elon Musk</a>&nbsp;<a href="https://ir.tesla.com/" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;earnings per share of 27 cents in the quarter, up from 16 cents a year ago. Revenue jumped 39% to $8.77 billion from $6.3 billion in 2019’s third quarter. As usual, sales of emissions credits to other automakers fattened the quarterly profits. Tesla reported $397 million of credit sales, essentially free money that goes a long way toward keeping the company in the black.&nbsp;



The upbeat results come after Tesla said this month that <a href="https://www.forbes.com/sites/alanohnsman/2020/10/02/teslas-electric-car-shipments-jump-44-as-production-rebounds-from-coronavirus-slump/">deliveries of its electric cars and crossovers jumped 44%</a> in the quarter to the highest in company history, aided by the new Shanghai plant. Even as the company works to ramp up that $2 billion facility, it’s also begun construction of a $4 billion Gigafactory in Berlin and a new U.S. Gigafactory that will be built near Austin, Texas, at a cost of about $1 billion. Even with added capacity in China, it’s unclear whether Tesla will hit Musk’s goal of selling 500,000 vehicles this year. 



“We have the capacity installed to produce and deliver 500,000 vehicles this year,” Tesla said in a letter to investors. “While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target. Achieving this target depends primarily on quarter over quarter increases in Model Y and Shanghai production, as well as further improvements in logistics and delivery efficiency at higher volume levels.”



The results were generally higher than analysts anticipated. Tesla shares rose about 3.3% in after-hours Nasdaq <a rel="noreferrer noopener" href="https://www.forbes.com/companies/nasdaq" target="_blank">NDAQ</a> <a href="https://www.forbes.com/companies/nasdaq">+2.6%</a> trading to $436.75. The stock was little changed at the close, ahead of earnings, at $422.64. 



ird Bridge Group in New York. “Not super surprising&nbsp;given how much they beat on deliveries, which was revealed earlier this month.”



Tesla’s operating margin of 9.2% was slightly below expectations, likely reflecting a vehicle mix that has skewed toward the Model 3 and Model Y, the company’s lowest margin vehicles, and away from the pricier Model S and Model X, Shields said.



Sales of pollution credits, including California zero-emission vehicle and U.S. CAFE credits, have become a lucrative source of revenue for Tesla as they are generated for each electric vehicle it sells. The $397 million received in the third quarter brings its year-to-date credit sales total to $1.18 billion, double 2019’s full year total.



“The regulatory credits business was stronger than our expectations,” Tesla CFO Zachary Kirkhorn said in a conference all. “We are tracking to more than double this year compared to last.”



Fourth-quarter deliveries will be critical to watch “given that they have softened their language around the previously stated goal of 500 K for the year,” he said. To reach that target, Tesla will have to get just over 180,000 vehicles to customers in the final quarter of 2020.



The company had about $14.5 billion of cash at of the end of the quarter and said it “should have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses.”



“We are currently building Model Y capacity at Gigafactory Shanghai, Gigafactory Berlin and Gigafactory Texas, and remain on track to start deliveries from each location in 2021,” the company said. “Tesla Semi deliveries will also begin in 2021. We continue to significantly invest in our product roadmap.”



Despite the pandemic, Musk’s wealth has surged this year because of his nearly 25% ownership stake in Tesla. Forbes estimates his net worth at <a href="https://www.forbes.com/profile/elon-musk/">$88.7 billion</a> as of Oct. 21.



-By Alan Ohnsman, Forbes Staff

Tag: Tesla

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