Tesla boss Elon Musk has been one of the worlds richest people for several years now, and that wealth recently went stratospheric when he became the first half-trillionaire.
Despite this, Musk has insisted he leads a largely unglamorous lifestyle. He said in 2021 that he lived in a Texas home valued at $50,000 (£38,000).
His former partner Grimes, with whom he has two children, told Vanity Fair in 2022 that he does not live the extravagant life of excess luxury many assume.
“Bro does not live like a billionaire. Bro lives at times below the poverty line,” she told the magazine. Once, she said, he refused to buy a new mattress, despite her side having a hole in it.
While his day-to-day living quarters may not be as lavish as one might expect, he is known to have a love of unique cars, including one that can morph into a submarine. He also has a private jet collection, worth many millions of dollars.
And then there was that small splurge back in 2022, when he bought Twitter for a casual $44bn.
Have you ever wondered exactly how much Elon Musk paid to get his hands on Tesla? It’s a fascinating story that shows how a relatively modest investment turned into one of the greatest business success stories of our time As someone who’s followed Tesla’s journey closely, I’m excited to break down the details for you!
The Initial Investment: $6.5 Million That Changed Everything
Back in 2004, Tesla was just a tiny startup founded by Martin Eberhard and Marc Tarpenning. They had incorporated Tesla Motors on July 1, 2003, with a vision to create electric vehicles that would revolutionize the auto industry.
When Elon Musk came into the picture in February 2004, he led Tesla’s Series A financing round with a personal investment of $65 million This was the majority of the total $7.5 million raised in that initial round. This investment earned Musk
- The position of Chairman of the Board
- Largest shareholder status
- Significant influence over the company’s direction
But here’s the kicker – Musk wasn’t the founder of Tesla! Despite popular belief, Musk was actually the fourth person to join Tesla, coming in after Eberhard, Tarpenning, and Ian Wright.
Musk’s Growing Investment in Tesla
Musk didn’t stop with his initial investment. As Tesla grew and needed more capital, he continued to put his own money into the company:
- February 2005: Helped lead Series B round of $13 million
- May 2006: Co-led third round of $40 million
- May 2008: Led fourth round adding another $40 million
By January 2009, Tesla had raised $187 million total, with Musk contributing approximately $70 million of his own money. That’s a serious commitment!
The Path to CEO
Interestingly, Musk didn’t immediately become CEO after his investment. The timeline went like this:
- Initially, Martin Eberhard served as CEO
- Eberhard was asked to step down in August 2007
- Michael Marks became interim CEO
- Ze’ev Drori took over as CEO in December 2007
- Finally, in October 2008, Musk became CEO during a difficult period when Tesla was facing financial challenges
During this transition period, Tesla was burning through cash at an alarming rate. In fact, “The Truth About Cars” website even launched a “Tesla Death Watch” in May 2008 because the company was in such dire financial straits.
Near-Death Experiences and Saving Tesla
What many people don’t realize is how close Tesla came to failure multiple times. By 2008-2009, the company was in serious trouble:
- In December 2008, Tesla secured $40 million in debt financing, narrowly avoiding bankruptcy
- In early 2013, Tesla was again running out of money and Musk proposed an $11 billion deal with Google
- A production improvement and sales push gave Tesla its first profitable quarter, saving the company
Musk has often said that Tesla was “about six weeks from bankruptcy” during the Model 3 production ramp in 2017-2018. That’s cutting it SUPER close!
The Financial Payoff
So how did Musk’s $6.5 million initial investment (which grew to around $70 million total) turn out? Pretty darn spectacular:
- As of December 31, 2019, Musk owned 38,658,670 Tesla shares (20.8% of the company)
- By July 1, 2020, Tesla’s market cap reached $206 billion, surpassing Toyota to become the world’s most valuable automaker
- Today, Tesla’s market cap makes it one of the most valuable companies on earth
Musk’s stake in Tesla has made him one of the richest people in the world, with his net worth fluctuating based on Tesla’s stock price. Not bad for a $6.5 million initial bet!
How Tesla’s Growth Transformed Musk’s Investment
Let’s look at some key milestones that show how Tesla’s growth multiplied the value of Musk’s investment:
| Year | Key Milestone | Impact on Investment |
|---|---|---|
| 2004 | $6.5M initial investment | Musk becomes largest shareholder |
| 2010 | Tesla IPO at $17 per share | Public valuation begins |
| 2013 | First profitable quarter | Validates business model |
| 2017 | Model 3 production begins | Mass-market strategy launches |
| 2020 | Exceeds $200B market cap | Investment multiplies thousands of times |
| 2021 | Joins S&P 500 | Institutional investment surges |
Beyond Money: What Musk Brought to Tesla
It’s important to note that Musk’s contribution to Tesla went far beyond just money. He:
- Insisted from the beginning on a carbon-fiber-reinforced polymer body for the Roadster
- Contributed significantly to car styling and design direction
- Maintained a long-term strategic vision focused on making affordable mass-market electric vehicles
- Took an active role in product design, though he wasn’t deeply involved in day-to-day operations initially
Musk’s vision was to start with a premium sports car (the Roadster) aimed at early adopters before moving into more mainstream vehicles including sedans and affordable compacts.
Lessons from Musk’s Tesla Investment
What can we learn from Musk’s investment in Tesla?
- Vision matters: Musk saw potential in electric vehicles when most people thought they were a joke
- Timing is crucial: He invested early in a technology that eventually became mainstream
- Persistence pays: Despite near-bankruptcy multiple times, staying the course led to success
- Skin in the game: By continually investing his own money, Musk showed his commitment
- Leadership counts: Technical expertise combined with business leadership proved powerful
The Settlement and Co-Founder Status
In a interesting twist, a lawsuit settlement agreed to by Eberhard and Tesla in September 2009 allows five people to call themselves co-founders:
- Martin Eberhard
- Marc Tarpenning
- Ian Wright
- JB Straubel
- Elon Musk
While Musk wasn’t there at the very beginning, his early and substantial investment plus his ongoing leadership have cemented his place in Tesla’s history.
Controversies Along the Way
Musk’s leadership of Tesla hasn’t been without controversies:
- In August 2018, he tweeted about potentially taking Tesla private at $420 per share, claiming “Funding secured”
- This led to an SEC lawsuit and settlement requiring Musk to step down as chairman for three years
- Both Musk and Tesla were fined $20 million each
Despite these challenges, Tesla continued to grow under Musk’s leadership.
So was Elon Musk’s $6.5 million investment in Tesla worth it? The answer is an undeniable YES. That initial investment, which grew to around $70 million as he continued supporting the company, has transformed into a fortune worth hundreds of billions of dollars.
More importantly, it helped build a company that has fundamentally changed the automotive industry, accelerated the transition to sustainable energy, and created technologies that are pushing the boundaries of what’s possible.
For anyone interested in business, investment, or innovation, Musk’s decision to back Tesla represents one of the greatest investment success stories of our time. It shows the power of believing in a vision even when the odds seem stacked against you.
What do you think about Musk’s Tesla investment? Was it brilliant foresight or just incredibly lucky timing? I’d love to hear your thoughts in the comments below!
The luxury mansions – that he sold
Musk once had an impressive real-estate portfolio. The Wall Street Journal reported in 2019 that he had spent $100m on seven houses in about seven years – most of them a stones throw from each other in the prestigious neighbourhood of Bel-Air, California.
Collectively, the properties boasted swimming pools, a tennis court, wine cellar, private library and a ballroom. One was a ranch house once owned by legendary Willy Wonka actor Gene Wilder.
But in 2020, Musk had a change of heart – tweeting that he would be “selling almost all physical possessions” and “will own no house”.
“Dont need the cash. Devoting myself to Mars and Earth. Possession [sic] just weigh you down,” he wrote.
There was one stipulation – that Gene Wilders house, “cannot be torn down or lose any [of] its soul”.
He did indeed sell the three-bedroom property – to Wilders nephew, Jordan Walker-Pearlman, after giving him a multi-million dollar loan to buy it. But in June 2025, Musk reclaimed ownership, after Mr Walker-Pearlman reportedly fell behind on the repayments.
In 2021, Musk tweeted that his “primary home” was a modest prefabricated house that cost him about $50,000 on the southern tip of Texas, where his aerospace company SpaceX operates – an area that has officially become a city called Starbase.
“Its kinda awesome,” Musk said about the humble dwelling.
The following year, Musk said he did not own a home at all, using it as an example of how low his consumption is, despite his enormous wealth.
“Im literally staying at friends places,” he told head of media organisation TED, Chris Anderson. “If I travel to the Bay Area, which is where most of Tesla engineering is, I basically rotate through friends spare bedrooms.”
This is nothing new – in 2015, then-Google CEO Larry Page told author Ashlee Vance that Musk was “kind of homeless”.
“Hell e-mail and say, I dont know where to stay tonight. Can I come over?”
There has been various speculation over the years that Musk is buying up properties around the US, however the home in Texas appears to be the only official house he personally owns.
Tesla shareholders approve Elon Musk’s potential $1 trillion compensation deal
FAQ
How much did Elon Musk buy Tesla for in 2004?
The three went looking for venture capital (VC) funding in January 2004 and connected with Elon Musk, who contributed US$6.5 million of the initial (Series A) US$7.5 million round of investment in February 2004 and became chairman of the board of directors. Musk then appointed Eberhard as the CEO.
How much did Elon Musk pay to start Tesla?
Musk led the Series A round of investment in February 2004; he invested $6.35 million, became the majority shareholder, and joined Tesla’s board of directors as chairman. Musk took an active role within the company and oversaw Roadster product design, but was not deeply involved in day-to-day business operations.
How much does Elon Musk own Tesla?
Mr. Musk was allowed under state law in Texas, Tesla’s corporate residence, to vote his own shares. The executive owns about 15 percent of Tesla’s stock.
What if I invested $10,000 in Tesla 10 years ago?
The company’s stock traded at approximately $13.48 per share 10 years ago. If you had invested $10,000, you could have bought roughly 742 shares. Currently, shares trade at $394.74, meaning your investment’s value could have grown to $292,834 from stock price appreciation alone.