How has Elon Musk changed the automotive sector?


Following the news that SpaceX and Tesla founder Elon Musk is now the richest person in the world – – Business Leader spoke to industry experts and analysed the data to find out how he has changed the automotive sector and grown his personal wealth to unprecedented levels.

Block-Builders analyst Raphael Lulay

The price of Tesla shares has risen by 869% within a year, while the competition has reported losses. Our data shows how exceptional entrepreneur Elon Musk differs fundamentally from his competitors in many respects.

The US carmaker is rapidly constructing production facilities. The Shanghai gigafactory was built in just under a year, while Daimler’s Factory 36 in Shanghai took around 30 months. BMW’s factory in Leipzig was similarly built in 36 months. Tesla acts as a very active developer who is prepared to take responsibility and, if necessary, initiate dismantling measures at its own expense.

Tesla is also an outlier in terms of advertising expenditure. While marketing budgets across the automotive industry have recently risen sharply, Tesla does not pay for any advertising at all, as the infographic shows. The Californians instead rely on free advertising via communication through Twitter. Elon Musk has 38.7 million followers, and Tesla itself has another 6.2 million. In contrast BMW has 2.1 million Twitter followers, placing the Munich-based company ahead of Volkswagen and Daimler, who have 135,000 and 67,000 respectively.

It remains to be seen whether such a high valuation on the stock market is justified. There is however no doubt that Elon Musk manages the company in a radically different way than most of the competition. His success so far seems to prove him right.

Tesla valued seven times higher than Ferrari, Porsche and Aston Martin combined – according to StockApps data

The coronavirus outbreak has affected many industries, but the automotive industry is among the hardest hit. After carmakers stopped production and dealerships closed showrooms amid COVID-19 lockdown, global car sales slumped worse than ever before. However, the luxury car market was generally less affected by the financial downturn caused by the coronavirus pandemic.

However, the market capitalisation of the world’s most valuable car company, Tesla, hit over $500bn at the start of 2021, almost seven times more than Ferrari, Porsche and Aston Martin combined.

2020 was been a fantastic year for Tesla, despite the COVID-19 effects on the global automotive industry. The company’s stock price surged by nearly 200% in the last three months and they are up about 500% on the year, despite a 4.9% revenue drop in the second quarter of 2020.

One of the reasons for such a premium valuation is Tesla’s ability to convince investors that it’s much more than just an automaker, and plans to make its vehicles capable of deploying into an autonomous ‘robotaxi’ ride-sharing service prove that.

In December 2019, the market cap of the world’s most valuable car company stood at $75.7bn, revealed the YCharts data. By the end of the first quarter of 2020, this figure rose to $96.9bn, despite the COVID-19 crisis. Statistics show Tesla market cap surged by 107% in the next three months reaching $200.8bn value at the end of June. At the beginning of 2021, it jumped over $500bn.

Personal wealth