It is commonly believed that Elon Musk owns the Tesla car company. He doesn’t. First, Musk only owns about 16 per cent of the company’s shares – even with the approximately $29bn (£22bn) additional share allocation he’s just received – so he is actually a minority shareholder.
Second, Tesla isn’t strictly a car company, even though it obviously makes them. It is principally a tech company, so its valuation and business model are radically different, and are based on its lead on autonomous (or self-driving) transportation.
Only recently, Tesla boasted that a customer in Austin, Texas, had their Model Y delivered to them directly from the assembly line, with the car driving itself for the half-hour trip. Tesla is built on self-driving technology, and that, in turn, is predicated on the continuing genius of Elon Reeve Musk.
So that explains a lot in respect of this headline-grabbing story about his “$29bn pay packet”. Such an outrageous package was proposed for, and by, Musk some years ago – but, given the objections of some shareholders, a court ruled it out. It actually amounted to some $50bn in 2018, but times change, and it seems as though Musk and his company have been devalued by his more recent adventures in Magaland.
In any case, a more ingenious method of turning capital into income was devised so that the richest person in the world could be just that little bit more loaded. Before the share deal, he was worth around $400bn, so he’s going to be a bit less than 10 per cent better off once the new shares have been sorted out. Enough to rub along.
This story, then, tells us a few things about Musk and Tesla. It certainly seems to be a further signal that he is moving away from politics and back to business. The Doge episode and the association with Donald Trump didn’t serve him, or his business interests, well.
Contrary to hopes/fears that having him hanging around the Oval Office and Mar-a-Lago as “First Buddy” would lead to some lucrative government contracts, now Trump is threatening to cut him off – which is especially bad news for SpaceX.
Musk has also gone a bit quiet about the “America Party” he has been planning in an effort to block Trump’s ruinous Budget by winning key seats in Congress in elections next year. Maybe Musk will press on with that, but it seems less likely he’ll do much more than provide lavish funding.
It’s just as well. The Doge project, for all the hype, is over, and it may have done more harm than good to the wellbeing of the American people (and, undeniably, the wider world) in destroying the US international aid agency.
The ill-advised salutes, the nutty tweets (as some of us still insist on calling them), and all the whooping about at the Trump rallies made Musk look more idiotic than evil, and were a grievous distraction. Not even he was able to help run the US, SpaceX, Tesla, and whatever else is going on simultaneously.
Musk was at risk of being the formerly richest man on Earth who overstretched himself and failed spectacularly in politics and in business. As the old Rolling Stones song – so popular at those Trump-Musk rallies – goes, “You Can’t Always Get What You Want”.
