Elon Musk has purchased approximately $1 billion (£735 million) worth of Tesla stock, in what analysts are interpreting as a strong vote of confidence in the electric car giant.
Tesla shares, which have underperformed so far this year, surged more than 6% in early trading on Monday following news of the buy.
Musk already owns around 13% of the company but has consistently pushed for greater control. He has championed Tesla’s investments in robotaxis, automation, and artificial intelligence (AI).
The Tesla board recently proposed a mammoth compensation package worth around $1 trillion. If approved, it would grant Musk up to a 12% stake in the company upon achieving specific performance milestones.
Last month, the board also offered Musk $29 billion worth of stock as part of an "interim" award. This came after a 2018 pay package was invalidated in a court ruling.
These proposals were preceded by discussions in which Musk demanded a 25% stake in the company, even suggesting he might walk away from Tesla if his demands were not met.
Danni Hewson, head of financial analysis at AJ Bell, said Musk may be attempting to rebuild his ownership of the company. “Markets like it when company executives buy shares in their own firms, as it often signals confidence in future performance,” she said.
However, she also offered a more cynical interpretation. “An inventive and ungenerous read of Musk’s move is that he saw Larry Ellison recently become the world’s richest man and decided to juice Tesla stock to reclaim the top spot,” she added. “Stranger things have happened.”
The roughly 2.5 million Tesla shares were acquired on Friday and disclosed in a regulatory filing on Monday. This marks Musk’s first open-market stock purchase since 2020.
The buy comes as Tesla navigates a difficult year, with declining sales, increasing competition, and the phasing out of US tax credits for electric vehicles. Musk has attempted to refocus investor attention on the potential of autonomous driving and robotics.
The company has also faced reputational challenges linked to Musk’s growing political activism. He was an outspoken supporter of US President Donald Trump during the 2024 election but later had a dramatic falling out with him.
Musk has also backed far-right causes in both the UK and Germany. On Saturday, he appeared via video link at a London rally organised by far-right activist Tommy Robinson, where he warned the crowd of looming violence, declaring they must “fight back or die”.
On Monday, the British government condemned Musk’s remarks, accusing him of using “dangerous and inflammatory language.”
Tesla’s board has stated that its proposed compensation packages are, in part, intended to ensure Musk winds down his political engagements.
In a recent interview with Bloomberg, Tesla board chair Robyn Denholm was asked about those assurances. She said Musk’s political views were his personal business but insisted he remained “back, front and centre” at Tesla.
“He is the right CEO for Tesla over this transformative period,” she added.
Source: BBC
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