The Richest Man in the World Takes on Elon Musk

Updated on:

Richest Man in the World

Richest Man in the World, the CEO of luxury giant LVMH, has just invested in the luxury car manufacturer Lotus, which is betting on EVs.


“Bernard Arnault: The King of Luxury, Leading the Billionaire Rankings”

Richest Man in the World

Bernard Arnault is the CEO and largest shareholder of French luxury giant LVMH. LVMH owns a galaxy of brands ranging from Dior, Louis Vuitton, Tiffany to champagne producer Veuve Clicquot.

“LVMH is home to 75 distinguished houses rooted in six different sectors. True to tradition, each of our brands builds on a specialty legacy while keeping an unwavering focus on the exquisite caliber of its products,” the company prides itself on its website.

In mid-December, Arnault, who is very discreet, dethroned Musk in all the billionaire elite rankings. Nearly two months later, the French tycoon is still sitting on the throne. His fortune is currently valued at $193 billion, up from $30.7 billion this year, according to Bloomberg Billionaires Index.

The French billionaire is resisting the recent return of Musk thanks to the reopening of the world economies, and in particular of China. In addition, affluent consumers have been less affected by the higher cost of living, while the average consumer has cut back on discretionary spending.


“The Battle for the Billionaire Throne: Lotus vs. Tesla”

Richest Man in the World

Arnault, 73, had ended Musk’s 15-month reign as head of the billionaires’ club. He had notably taken advantage of Tesla’s stock market rout to overtake the Techno King, as Musk is know at Tesla. Tesla stock lost 65% of its value last year. Musk’s net worth is tied to his stakes in his companies and specifically Tesla and SpaceX.

This year, Musk seems determined to reclaim his crown. His fortune is currently valued at $174 billion, up from $36.5 billion according to Bloomberg Billionaires Index. About $19 billion only now separate him from Arnault and the first place.

Aside from the global hierarchy of the haves, the rivalry between the two men now seems to be shifting to a field that Musk knows very well: electric vehicles, aka EVs. Musk and Tesla dominate this segment considered the future of the automotive industry.

Last year Tesla achieved record results: the Austin, Texas-based automaker produced 1.37 million vehicles and delivered 1.3 million. And for 2022, Musk estimates Tesla could manufacture to 2 million vehicles, though the automaker has said it’s aiming for 1.8 million units.

Revenue rose 51% to $81.4 billion for net profit of $12.6 billion.

“Arnault’s Bet on Lotus: Challenging Tesla’s Dominance in the EV Market”

These figures demonstrate Tesla’s dominance over all its competitors in EVs. But this big advantage of Musk’s group does not seem to scare Arnault, who has just invested in the manufacturer of sports and luxury vehicles Lotus. Founded in 1948, the English brand is now betting in electric vehicles.

Arnault’s investment in Lotus comes as part of the British brand’s IPO through the so-called SPAC deal expected in the second half of this year. Specifically, Lotus will merge with L Catterton Asia Acquisition Corp, a “blank check” investment firm affiliated with Arnault. LVMH has indeed partnered with the company to develop its investments around the world. LCAAC went public in 2021, raising $250 million.

Lotus, which was acquired in 2017 by the Geely group, shareholder of Volvo Cars, Polestar and Mercedes, will be valued at $5.4 billion after the merger, the companies announced on Jan. 31.

“This is an exciting time for Lotus Tech as we work towards delivering our first fully electric hyper SUV, applying our innovation and engineering expertise to meet the rising global demand for luxury EVs,” said Qingfeng Feng, CEO of Lotus Tech. “In L Catterton, we have found a partner with an impressive track record of not only building iconic premium brands and creating value for companies by leveraging worldwide consumer expertise, but also bringing them to public markets and powering their long-term development.”

Richest Man in the World

“Indirect Rivalry between Arnault and Musk in the Electric Vehicle Market: Lotus Tech IPO”

The tone is just as optimistic on the side of L Catterton.

“The global EV market is expanding rapidly, with the luxury segment growing at a faster pace than the broader industry,” said Chinta Bhagat, Co-CEO of LCAA. “China, the EU, the UK, and the U.S. are expected to fuel the majority of this growth over the next decade as government policies in these regions provide further tailwinds for EV sales.”

He added that “Lotus Tech is well positioned to benefit from these dynamics.”

The IPO will be on the Nasdaq. All existing Lotus Tech equity holders, including Geely Holding, NIO Capital, are expected to retain their stakes, They will own  nearly 89.7% of the new company.

As a result, the clash between Arnault and Musk will be indirect.

Richest Man in the World

Lotus Tech’s Electric SUV to Challenge Tesla in the Luxury EV Market

It will also be in a niche and exclusive market. Tesla produces the Model S luxury sedan and the Model X luxury SUV. Lotus plans to start delivering its first fully electric SUV, Eletre, in China this quarter and in the UK and EU later this year. The group has not yet announced a date for deliveries to the United States.

Lotus made an impression when the James Bond film ‘The Spy Who Loved Me’ was released in 1977. The amphibious Lotus Esprit S1 featured in the movie is a star in itself.

Musk has never made a secret of drawing inspiration “partly” from the Lotus Esprit S1  for the design of the Cybertruck, Tesla’s very first pickup/truck whose production is supposed to start this year.

Richest Man in the World Richest Man in the World Richest Man in the World Richest Man in the World Richest Man in the World Richest Man in the World Richest Man in the World Richest Man in the World Richest Man in the World Richest Man in the World