QTR’s Fringe Finance: All Hat and No Cattle

One of the top tech stories of the past decade has been the rollout of electric vehicles. Even as recently as 2010, it seemed unlikely that they could be produced at mass scale. Or provide a consistent driving experience for daily use.

However, that all changed with Tesla Motors (TSLA). The EV manufacturer not only developed several EV models, they were stylish, accelerated speedily, and are fun to drive. Of course, Tesla’s larger-than-life CEO, Elon Musk has done far more.

With startup SpaceX, Musk has found ways to significantly lower the cost of orbital launches. Between that and buying Twitter, the co-founder of PayPal (PYPL) has at times been the world’s wealthiest man.

Part of that wealth creation has come from the easy money policies of the past 15 years. Most of the growth of Tesla and SpaceX has come amid a world of near-zero percent interest rates. That low-cost capital has made financing less expensive than it would otherwise cost.

Capital markets allow companies to expand. Usually smaller companies start with borrowing.

That trend has slowed in recent years as interest rates have started to rise. For Musk and Tesla, SpaceX, and privately-held Twitter, that makes the cost of financing this empire from growing further. And Musk could continue to face challenges from the publicly-traded Tesla.

That suggests that investors may have a rockier ride with tech stocks going forward, even with interest rates starting to trend lower now.

To read the full analysis on Elon Musk’s empire and the challenges ahead, click here.