After months of continuous decline in stock prices, Tesla CEO Musk's weekend trip to China has clearly surprised the market.
On Monday, Tesla's stock price saw the largest increase in over three years, and Musk's net worth also achieved the biggest surge in over two years in the past five days. This has led Wall Street analysts, who have been watching Tesla with skepticism in recent months, to exclaim: "He's back!"
"Musk is back"
On April 29, Tesla CEO Elon Musk concluded his visit to China. On the day he arrived in China on the 28th, the China Association of Automobile Manufacturers announced that cars from six companies, including Tesla, met four data security compliance requirements. Media widely believe that this clears a major obstacle for the FSD system to enter the world's largest automotive market.
Sources say Tesla will deploy its FSD autonomous driving service in the Chinese market based on lane-level navigation and maps provided by Baidu.
Encouraged by this news, Tesla's stock price surged by 15.31% on Monday, marking the largest increase in over three years. China, as the world's largest automotive market, holds significant importance for Tesla if it can get approval to deploy its driving assistance systems there.
Morgan Stanley automotive industry analyst Adam Jonas, who recently lowered Tesla's price target, published a report titled "He's Back" on Monday. In the report, he mentioned, "Tesla's potential easing with China in areas like autonomous driving/FSD is surprising and deserves more research and understanding. Currently, Musk's launch of FSD in China has won China's blessing, seemingly addressing people's inherent concerns about Tesla's profits in China (we estimate China accounts for more than half of the profits)."
Jonas also noted that since a Delaware judge rejected Elon Musk's compensation plan, investors have been seriously concerned about whether Musk is "fully committed" to Tesla, which has significantly impacted Tesla's stock price.
Against this backdrop, Musk's visit to China demonstrates his value for Tesla and holds greater significance, as it alleviates concerns that he might be distracted by "a broader Musk ecosystem (SpaceX/X.AI, etc.)."
Musk's net worth soaring
According to the Bloomberg Billionaires Index, Musk's net worth has been soaring in the past few days after hitting near a year-low: over the last five days, his net worth has increased by $37.3 billion, approximately 269.76 billion RMB. This marks his largest weekly gain since March 2022.
On Monday alone, Musk's wealth increased by $18.5 billion. Surpassing Mark Zuckerberg last week, he now ranks as the world's third-richest person with a net worth of $201.5 billion, and is close to overtaking the second-richest, Jeff Bezos.
Musk's wealth mainly comes from his stakes in Tesla, as well as his shares in his space exploration company and The Boring Company.
In 2020 and 2021, Musk's fortune skyrocketed at one point, but since agreeing to acquire Twitter for $44 billion in March 2022, his net worth has been fluctuating, with most of this year seeing a decline.
Prior to the recent rebound, Tesla had been one of the worst-performing stocks in the S&P 500 for much of this year due to continuous price cuts and unexpected delivery volume declines. Meanwhile, the value of the company, according to an estimate from Fidelity Blue Chip Growth Fund, which invested alongside Musk, has dropped by about 73% since Musk acquired it two years ago.
