In a move that boosted Tesla’s stock in midday trading on Monday, it was revealed that Chief Executive Elon Musk purchased approximately $1 billion worth of the company’s shares.
The vote of confidence signals that Musk plans to stick around after a recent raise and is optimistic about Tesla’s robotaxi venture. As EV sales slump, Tesla’s future is increasingly reliant on its autonomous technology, including self-driving taxis and its humanoid robot dubbed Optimus.
Musk bought the shares shortly after Tesla’s board chair, Robyn Denholm, defended his proposed pay package, which would award Musk nearly $1 trillion worth of stock depending on the company reaching a series of ambitious performance milestones.
A Delaware judge has twice struck down a previous pay package of shares worth around $56 billion. Amid the legal battle, Tesla’s board awarded Musk $29 billion in shares as an interim effort to persuade him to “stay focused.”
Musk has returned to the top of the rankings as the world’s richest person after briefly ceding the pole position to Oracle co-founder Larry Ellison last week.
The SpaceX owner bought the Tesla shares indirectly through a revocable trust on Sept. 12 Friday, according to a regulatory filing released Monday. Musk, 54, last bought Tesla stock in the open market in February 2020, according to data compiled by Bloomberg.
The chief executive offloaded more than $20 billion of the company’s shares in 2022, the year he acquired Twitter, now known as X.
Tesla’s sales have dropped for much of this year in response to Musk’s brief but controversial stint in Washington as leader of the Department of Government Efficiency. Electric vehicle sales have also taken a hit from the expiration of a federal EV tax credit that President Trump eliminated.
Market researcher Cox Automotive estimated that Tesla’s share of the U.S. electric vehicle market slipped below 40% in August. Registrations also kept slumping last month in major markets across Europe, and vehicle shipments from the company’s Shanghai factory dropped in both July and August.
Musk is hoping for a big boost from Tesla’s emerging robotaxi service, which rolled out in Austin in June. The technology has faced several roadblocks, with experts saying it is not as safe or effective as the technology used in Waymo’s self-driving cars.
Tesla made headlines last month when a Miami jury ordered the company to pay $240 million to victims of a fatal crash involving its autopilot mode. The case highlighted Musk’s exaggerated claims about Tesla’s autonomous technology.
A new version of Tesla’s full self-drive mode is expected to be added to its robotaxi fleet in the coming months, according to analysts.
“Musk stated that V14 will be two to three times better than a human driver,” William Blair analysts Jed Dorsheimer and Mark Shooter wrote in a note Monday.
Musk’s purchase of the shares “sends a strong signal of confidence in the most important part of Tesla’s future business, robotaxi,” they wrote.
At an unveiling event for a prototype of the self-driving Tesla Cybercab last year, Musk expressed lofty ambitions for the future.
He conjured up a world where every family has an Optimus robot capable of grocery shopping, babysitting and watering the plants. People will be able to sleep in the back of their Tesla as it drives across the country. The automated labor would make goods and services less expensive and more accessible, he said.
“It will be an age of abundance, the likes of which almost no one has envisioned,” Musk told the crowd at the time.
Denholm, who’s been chair of Tesla’s board since 2018, called Musk a “generational leader” in a Friday interview with Bloomberg Television. She downplayed concerns that Musk’s political activity has hurt the company’s performance and suggested he has wide latitude in this regard.
“What he does from a personal perspective, in terms of his political motivations, is up to him,” Denholm said. “We’re in a democracy, so everybody gets to voice their points of view.”
Musk has a net worth of about $419 billion, according to the Bloomberg Billionaires Index.
Bloomberg contributed to this report.
The post With stock purchase, Elon Musk signals confidence in Tesla’s self-driving tech appeared first on Los Angeles Times.
