Elon Musk Becomes The Richest Man In The World

INTRODUCTION

Elon Musk is the CEO and co-founder of Tesla, an electric-vehicle making company. Also, he is the CEO and founder of SpaceX, an advanced rockets and spacecraft manufacturing company. Billionaire Elon Musk became the wealthiest person again on January 12, 2021 (Tuesday).

Elon Musk became the world’s richest person on January 8, 2021 (Friday) at first. On January 11, 2021 (Monday), the shares of Tesla fell by 8%. Due to this, Musk’s position went down to second, after Jeff Bezos. But again, Tesla’s stock increased by 4.7% on January 12, 2021 (Tuesday). It increased Elon Musk’s net worth by $7.8 billion, resulting in a total net worth of $183.8 billion. Now, Jeff Bezos is the second richest person with a net worth of $182.4 billion. His net worth is $1.4 billion less than that of Elon Musk.

Elon Musk’s net worth has been skyrocketing since the past year. Until March 2020, his net worth was $24.6 billion. After that, it increased rapidly, i.e., by almost $160 billion. One of the main credits for this goes to Tesla’s rising stock prices. In 2020, the shares of Tesla grew by more than 720%. Also, Tesla was listed in the S&P 500 Index in late December 2020. It was one of the reasons for its rising share price.

BACKGROUND OF ELON MUSK

Although Elon is having the time of his life now, his childhood was not very sound. Elon Musk was different than the other kids, since his childhood. He was born on June 28, 1971, in Pretoria, South Africa. After the separation of his parents, Elon chose to live with his father. But the experience was bad for him since his father was not a good parent. So, there was no one to take care of him in his home. Moreover, Elon was bullied in his school. There was a time when he was beaten to the point where he was hospitalized.

Elon was a bookworm since his childhood. His memory is also termed as photographic memory. Along with the books, Musk was also interested in computers. At the age of 10, he began learning computer coding. And at the age of 12, he developed a computer game named Blastar. Later, he sold his game for $500.

When Elon reached 17, he decided to leave South Africa. At that time, military service was mandatory in South Africa. To escape that, Elon moved to Canada. But Musk wanted to reach the USA. So, he took a transfer to the University of Pennsylvania. Elon graduated with two degrees from there – Physics and Economics.

After that, with his brother, Elon opened a company named Zip2. Later, in February 1999, Compaq Computer bought the company for $305 million. With the money, Elon started another company, X.com, which later became PayPal. In 2002, eBay bought this company for $1.2 billion. When eBay bought PayPal in 2002, Elon walked away with $180 million. He was very successful. But instead of calling it a career, he sunk all his winnings into new ventures. He put $100 million into SpaceX, $10 million into Solar City, and $70 million into Tesla.

HISTORY OF SpaceX

Elon was always interested in science-fiction. So, he was on his way to change his imaginations into reality. Elon got the idea of Mars Oasis in 2001. As an experiment, he wanted to send greenhouse from earth to mars and grow plants there. For this, he required rockets and spaceships. Musk found out that he could get rockets efficiently from Russia. So, in 2001, musk went to Russia to talk about his projects. But Russians did not take Musk seriously.

In 2002, Musk again went to Russia to buy 3 refurbished Dnepr Intercontinental ballistic missiles (ICBMs). These missiles could be used as rockets. But the price of one ICBM was $8 million. Musk found it to be very expensive and rejected the offer. He thought he can make rockets at a much lower cost. Thus, he founded his own company, SpaceX in 2002.

Elon Musk wanted to make spaceflight easy and cheap. So, he founded Space Exploration which later became SpaceX. The main objective of SpaceX is to take human civilization to Mars. Elon wants humans to become a multi-planetary species.

According to Elon Musk, living on one planet can be risky. For instance, WW III could happen and the nuclear explosions could destroy the planet. So, he believes humans should start looking for possibilities on other planets as well.

FAILURES AND ACHIEVEMENTS OF SpaceX

In 2006, the first rocket of the company was the Falcon 1. It was a failure. It only survived 33 seconds. The rocket crashed down violently because of a fuel leak. In March 2007, the second launch attempt went better. Everyone thought that they made it. But things did not go as planned. The rocket started to wiggle. The slosh created an opening in the engine. When the engines sucked in air, the rocket flamed out.

In August 2008, the Falcon1 made its third attempt. Again, it went well at the start. But then the first and second stages collided after they separated. SpaceX had three failed rocket launches. The failure of the third rocket almost killed SpaceX. To make matters worse, the 2008 financial crisis made it difficult to get funding from investors. At the same time, Elon had to save Tesla which was also about to die.

Musk had money that could only fund the fourth launch. On 28^th September 2008, the fourth rocket, i.e., Falcon 1, was successfully launched. It achieved the earth orbit. This news made history.

On December 23, 2008, NASA awarded SpaceX a $1.6 billion contract to handle cargo transport for the International Space Station. Elon came so near to losing the company at the end of 2008. Yet, at the very last minute, the company pulled through. But this was still an uphill battle. After the success of the Falcon 1’s fourth attempt and the contract with NASA, SpaceX turned its attention to building a bigger rocket, the Falcon 9.

But the Falcon 9 was not reusable at that time. Elon knew building reusable rockets was the only way to make space travel affordable. SpaceX worked on modifying the Falcon 9 to preserve the most expensive part, the booster.

SpaceX failed over and over. But then on December 22, 2015, the Falcon 9 landed its booster for the first time. In 2018, SpaceX built a more powerful rocket, the Falcon Heavy. Two out of those three boosters managed to land. The mission was a success. The Falcon Heavy launched a Tesla Roadster carrying a dummy astronaut into orbit. In May 2020, NASA astronauts Bob Behnken and Doug Hurley traveled to the ISS on Falcon 9.  It was a historic moment.

SpaceX is setting its sights on developing a fully reusable rocket called Starship. It would carry people to the moon, Mars, and back.

ABOUT TESLA

Tesla is disrupting the automotive industry by creating affordable EVs of all kinds. But it almost didn’t make it. Success was a long shot and Elon Musk knew it. In 2003, in Silicon Valley, two engineers created Tesla. They were Martin Eberhard and Marc Tarpenning. They named it after Serbian-American inventor, Nikola Tesla. Back then, Tesla was called Tesla Motors. They saw an opportunity to create an electric car.

Elon came into the picture when the founders went looking for funding. He became chairman of Tesla’s board. 2006 was a big year for Tesla. The roadster made its official appearance. It was a good-looking, fast electric car. But there were quality issues and a lot of production problems. In the end, Eberhard was ousted as CEO before the roadster even went into production. The production did not happen until 2008.

Tesla was running out of money. The company budgeted $25 million for the development of the Roadster. But it ended up costing nearly five times more. By the fall of 2008, Tesla had only $9 million left to fund the entire company. It was a hard time with multiple CEOs coming and going. In the end, Elon was left in charge.

HOW ELON MUSK SAVED TESLA

Elon fought hard to save his company. He cut 25% of Tesla’s workforce and asked friends to cover payroll. But by December 2008, Tesla was about to die. Still, he didn’t give up. He scraped together $20 million from various sources. In the end, Elon managed to secure a $40 million round of financing on Christmas Eve.

Tesla needed more money to stay alive. That came in May 2009. German automaker Daimler invested $50 million by taking a 10% stake in the company. Also, the US Department of Energy had a program backing cleantech startups. Tesla received a $465 million loan from there. The following year, Tesla found a more stable solution when it went public.

Despite the problems with the Roadster, Tesla had achieved something no company had ever done before. It proved that electric cars could be cool and fast. But the Roadster was too expensive for most people. It cost more than $100,000. So, they built another car. In 2012, Tesla stunned the world when it began shipping the Model S Sedan. It took everyone’s breath away.

The Model S was high in demand. But still, customers who put down a $5,000 deposit were hesitant about their purchase. There were complaints about the interior, kinks with the car, no parking sensors and cruise control. There were also concerns about the resale value.

Elon did three things to save Tesla. First, every Tesla employee called everyone who put down a deposit. They tried to convince them to go through with buying the car. Second, Elon convinced Larry Page, the CEO of Google to buy Tesla if the company did run out of money. Third, Tesla shut down its factories when orders were not coming in fast enough. The strategy worked.

On May 8, 2013, Tesla stunned Wall Street by posting its first-ever profit as a public company. Tesla made $11 million on $562 million in sales. But there were more hardships to come. There was a huge demand for the Model 3. It meant the company had to produce the cars in time. Tesla struggled to meet its production targets. Tesla was bleeding money as it tried to increase the production of the car. It lost $1 billion in the first half of 2019.

Despite the difficult production process, Tesla managed to pull through. In the second half of 2019, it delivered 92,000 Model 3s. The latest model, the Model Y, was ahead of its schedule. Tesla has managed to survive.