Tesla's share price fell by about 10 per cent at market close on Thursday, giving the company a market value of $823.79 billion.
Tesla's stock is up 143 per cent since the start of the year but down 3.2 per cent over the past 12 months.
Mr Musk and other company executives said during an earnings call on Wednesday that vehicle production would slow down during the third quarter due to shutdowns to allow for factory improvements.
“We continue to target 1.8 million vehicle deliveries this year, although we expect that Q3 [third quarter] production will be a little bit down because we've got summer shutdowns for a lot of factory upgrades, so just probably a slight decrease in production in Q3 for sort of global factory upgrades,” Mr Musk said on the call.
He cut prices several times over the past year in the US, China, Singapore and other markets to shore up the company's position against rival EV makers and boost sales, and has signalled that Tesla may continue to do so amid a slowing global economy.
The price of some of the car maker's models have been cut by as much as 25 per cent. In the US alone, Tesla has reduced prices at least six times this year.
Mr Musk's strategy has helped the company to beat analysts' estimates.
Tesla delivered a record 466,140 vehicles in the second quarter of this year, up 83 per cent on an annual basis. Analysts surveyed by Bloomberg had expected Tesla to ship 448,350 cars during the quarter.
The company produced 479,700 vehicles during the period, including 19,489 Model S and Model X cars and 460,211 Model 3 and Model Y cars. In the same period last year, it produced 258,580 vehicles.
Despite the lower margins and price cuts Tesla's second-quarter net profit jumped an annual 20 per cent to more than $2.7 billion, marking the company's 16th straight profitable quarter and seventh consecutive three-month period with more than $2 billion in profit.
Even after his wealth plunged on Thursday, Mr Musk is still the richest person in the world, with a net worth of $234 billion, according to the Bloomberg Billionaires Index.
Amazon founder Jeff Bezos is the third richest man in the world with a fortune of $155 billion, followed by Microsoft co-founder Bill Gates at $138 billion and Oracle founder and chairman Larry Ellison, who has a stake in Tesla, at $131 billion after his wealth dropped by about $3.7 billion.
World’s top 10 richest people
1 Elon Musk – $234 billion
2 Bernard Arnault – $201 billion
3 Jeff Bezos – $155 billion
4. Bill Gates – $138 billion
5. Larry Ellison – $131 billion
6 Steve Ballmer – $120 billion
7 Warren Buffett – $116 billion
8 Mark Zuckerberg – $110 billion
9 Larry Page – $109 billion
10 Sergey Brin – $104 billion