Billionaire Elon Musk has made a significant investment in his electric vehicle company, Tesla, acquiring approximately $1 billion (£735 million) in shares, a move that analysts view as a confidence boost for the automaker. Following the announcement of his stock purchases, Tesla’s shares experienced a notable increase, jumping over 6% during early trading on Monday.
Musk’s actions came at a time when Tesla’s stock has faced challenges, struggling to gain traction in the market throughout the year. With this latest purchase, Musk now owns around 13% of Tesla, but he has been vocal about his desire for greater control over the company. His ambitions include driving investments in emerging technologies such as robotaxis, automation, and artificial intelligence.
Recently, Tesla’s board proposed a compensation plan potentially valued at approximately $1 trillion, which could grant Musk up to 12% of the firm’s shares if specific performance targets are met. Additionally, the board announced a separate interim compensation package worth $29 billion in shares for Musk, following a court ruling that voided a previous pay agreement from 2018.
Discussions have indicated that Musk sought a 25% stake in the company, threatening to resign if his demands were not met. His recent stock purchases, totaling around 2.5 million shares, mark the first time since 2020 that he has bought shares on the open market, underscoring his commitment to the company amid a turbulent year.
However, Tesla faces hurdles such as declining sales and intensifying competition, particularly as federal tax incentives for electric vehicle purchases in the U.S. have diminished. Musk’s foray into politics has also drawn scrutiny, which some believe has negatively impacted Tesla’s brand. He has been an outspoken supporter of former U.S. President Donald Trump and has aligned himself with far-right causes in various countries, prompting backlash.
In a reported incident, Musk faced criticism from the British government after delivering a message at a rally organized by far-right activist Tommy Robinson. He warned attendees about impending violence, stating the need to “fight back or die,” which led to accusations of his use of inflammatory rhetoric.
Tesla’s board explained that their compensation plans for Musk were partly designed to ensure a timely reduction in his political engagements. When asked about Musk’s political motivations, board chair Robyn Denholm maintained that while Musk’s personal political actions are his own to manage, he remains a pivotal figure in leading Tesla through this transformative phase.
