You may own a company that sells electric cars, but you for sure do not own a company that has sent a car to space. No one has achieved this bizarre but groundbreaking feat, no one but Elon Musk. Both Tesla and SpaceX have managed to constantly top the charts in their respective industries. Tesla had revenue of a whopping $31 billion in 2020, and a net income of over $730 million, it is one of the few companies which play a huge part in making its CEO Elon Musk, the richest man in the world. Let’s know How Does Elon Musk Make Money?
Currently, with an astonishing net worth of $200 billion, a feat that only a few people have achieved, Elon Musk is the richest man on the planet! With such a whopping amount under his name, one must wonder “How does Elon Musk make money?” We have mentioned just that in this article.
How Does Elon Musk Make Money?
Elon Musk is one of the largest shareholders at Tesla, being the CEO he owns over 22% of the company which amounts to 227 million of the total 1.1 billion shares, which results in a whopping $180 billion. This money is tied in the stocks, which are often volatile, hence the net worth may go up and down depending on the market conditions. Tesla is Musk’s primary source of income.
Along with Tesla, Musk has his passion project in the form of SpaceX which he co-founded and is currently both the CEO and CTO (Chief Technical Officer). Musk owns over 50% of the company and 80% of the voting rights.
Other than the aforementioned companies, Elon has a few other ventures that he owns, they are mentioned below:
- The Boring Company
- OpenAI
- Neuralink Corporation
The Boring Company
TBC or more famously known as The Boring Company is a tunnel construction and infrastructure company found by Musk in late 2016. Initially started as a tweet, the idea of a tunnel and boring company struck Musk’s mind, and voila! The Boring Company had already started digging a 30-foot wide and 50-foot long trench to test the idea, on the site of SpaceX’s office in Los Angeles. Digging on his property meant not asking for any permits or having any further roadblocks.
With such an ambitious project, Musk aims to solve the problem of irritable traffic by constructing a network of roads under the ground. The company has completed various projects across the country, including the tunnels in Las Vegas, and is working on private tunnels as well. As of 2021, they are working with governments of different countries to build time-saving and safe commuting solutions.
OpenAI
In late 2015, Musk and a few other associates and investors contributed over $1 billion to the formation of OpenAI. The company researches in the field of AI, with one aim in mind, to develop and promote AI that can help in the well-being of human beings. OpenAI frequently collaborates with other institutions and has their research and patents open to the general public. OpenAI is very famous in the gaming circles as it is known for defeating various professional esports players like Dendi and even the two-time International champion team OG in the game of DotA 2.
In early 2018, Musk resigned from the board, due to a potential conflict with Tesla AI for auto-pilot features in cars. Musk remains an investor and donor. OpenAI still ranks among one of the most valuable Artificial Intelligence companies.
Neuralink Company
In mid-2016, Elon Musk along with a group of researchers and scientists from neuroscience, biochemistry, and robotics found the Neuralink company. The initial goals of Neuralink were to innovate and develop technology that can prove useful in treating various brain diseases. Neuralink also planned to move towards human enhancement and transhumanism, which is the physical addition of technology to the human body. Neuralink was very secretive about its operations and research in the beginning.
Neuralink is also in the process of developing a device that once, surgically implanted in your brain, can make you communicate with machines and control them as well. This movie-like description may very well be a reality in the coming years! Since this is a very controversial area of research, Musk has been receiving mixed critical reviews. But the success of Neuralink will only encourage more research in the field of neuroscience and neuroanatomy.
Education
Before establishing so many successful companies and making a name for himself as a successful entrepreneur, Musk was just a normal college student. Graduating with double degrees, a B.Sc (Bachelor of Science) in Economics, and a B.A. (Bachelor of Arts) in Physics in 1997. Before graduating, Musk had interned at Pinnacle Research Insitute and Rocket Science Games, both in the Silicon Valley. Musk was also accepted to a Ph.D. in material sciences at the University of California.
Before SpaceX and Tesla
Initial Startups
In 1995, Zip2 was found with the help of his brother, Kimbal, and friend Greg Kouri, funded by angel investors. Zip2 was an internet city guide for the magazines and newspaper publishing industry, supplemented by yellow pages, directions, and maps. Musk faced various hardships and failures during the initial operation of the company. Later, the company was contracted with The Chicago Tribune and The New York Times. Zip2 was later acquired by Compaq for over $300 million, an astonishing amount, of which Musk pocketed $22 million. The company proved to be of great success for Musk, fueling his initial aspirations to crack into Silicon Valley.
After the success of Zip2, Musk founded X.com. X.com offered a variety of financial services and it was also an email payment company. Within a few months, the user base was over 200,000. It was one of the very first online banks to be insured federally. Musk’s leadership style was criticized and Bill Harris was named the CEO. The next year, X.com merged with Confinity. Confinity already owned a big giant in the form of PayPal, which was more famed than X.com. The higher-ups of the company focused more on PayPal rather than X.com. In 2001, the merged company was renamed PayPal. Musk was also ousted.
The next year, PayPal was acquired by the e-commerce giant eBay for $1.5 billion in stock. Musk owned the most amount of stock, a whopping 11.7%. Which translated to over $100 million. With this, Musk was successful in creating another flourishing and demanding company.
Venture into SpaceX
After being involved with the Mars Society, a non-profit organization that aims to promote the settlement and human exploration of Mars, Musk was convinced to construct plant growth chambers on Mars. After being humiliated and rejected for his plans to purchase refurbished ICBMs (Intercontinental Ballistic Missiles) in Russia, Musk returned empty-handed to the United States. A year later, Musk purchased three ICBMs. After being offered rockets at a very expensive price ($8 million), Musk decided to build his own company to produce affordable rockets and engines.
With the fortune acquired from the PayPal acquisition, Musk established Space Exploration Technologies Corp., famously known as SpaceX in 2002. He is both the founder and Chief Executive Officer of SpaceX and also the Chief Engineer. In 2005, Falcon 1 is designed and SpaceX is testing it intending to have reusable space flight. In 2006, SpaceX is awarded $280 million by NASA to develop and build Falcon 9. In 2008, after a series of unsuccessful launches, Falcon 1 was successfully launched into the Earth’s orbit, it became the first private-owned fuel rocket to do so. SpaceX has thus launched various rockets along with both manned and unmanned flights to test the velocity and various conditions in the earth’s orbit and even in outer space. In 2018, SpaceX gained publicity for launching Falcon Heavy into space, along with Musk’s own Tesla Roadster as a payload.
Tesla Inc.
Tesla Inc. was established by Martin Eberhard and Marc Tarpenning in 2003. The two men played great roles and were deeply involved in every aspect of the company. Musk was involved in 2004 as he led the Series A funding and invested over $6 million to become the majority shareholder, also joining the board of directors as a chairman.
Musk was very active in the company, overseeing the production of Roadster, the Tesla’s electric car prototype. Musk assumed the position of CEO in 2008. Under Musk’s reign, Tesla sold over 2,500 units of Roadster in 2008 alone. The following years saw the production of Model S, Model X, which is the world’s best selling car with over 500,000 units sold worldwide.
In 2019, Cybertruck was unveiled, it opened to mixed reviews and criticism. Tesla’s stock has multiplied ever since its IPO (Initial Public Offering) in 2010. It has also entered the S&P 500, all under the leadership of Musk.
Conclusion
The majority of Musk’s fortune exists in the form of shares, most of them being Tesla’s.
Known for his questionable decisions and innovations along with wit and charm, Elon Musk has cemented his place as one of the richest and powerful people on the planet. With plans of colonizing Mars with SpaceX and leading the world through a new phase of electric cars, Musk has it all mapped in his head. Though very controversial but brave, Musk has managed to shun his critics. The Rocket Man as he’s called, will be remembered for his innovations and solid engineering.
