Elon Musk buys $1bn of Tesla shares, sending stock higher

Elon Musk purchased roughly $1 billion (£735 million) worth of Tesla shares, a filing disclosed Monday showed, prompting the electric car maker's stock to jump more than 6% in early trading.

The purchases, completed on Friday, amounted to about 2.5 million shares and were reported in a regulatory filing on Monday. They are Musk's first open-market stock buys since 2020 and come as investors watch the company's strategy and leadership closely.

Analysts and market observers described the move as a vote of confidence by Tesla's largest individual shareholder, who already owns roughly 13% of the company. Musk has sought greater control of Tesla in recent years as he has pushed the firm to invest in robotaxis, automation and artificial intelligence.

The purchases come amid a broader tug-of-war over Musk's compensation and ownership stake. Tesla's board this year proposed a compensation plan valued at roughly $1 trillion that could grant Musk up to 12% of the company's shares if it meets a series of operational and market-value targets. The board also said last month it would grant Musk about $29 billion worth of shares as a separate interim award after a 2018 package was struck down in court. Company filings and media reports show there have been discussions in which Musk at times demanded a 25% stake and threatened to leave the company over the issue.

Tesla has faced headwinds in recent months. Sales have softened as competition in electric vehicles intensifies and U.S. federal tax incentives for EV purchases have lapsed for some buyers, pressuring demand. The company has also contended with reputational challenges tied to Musk's political activity.

Musk was an early supporter of former President Donald Trump during the 2024 election cycle but later broke publicly with him. The billionaire's recent appearance by video at a London rally organized by far-right activist Tommy Robinson drew criticism from the British government, which accused Musk of using "dangerous and inflammatory language." Reports of the event said Musk told the crowd that violence was coming and urged them to "fight back or die." The remarks intensified scrutiny of his public interventions.

Tesla's board has said its proposed compensation arrangements are partly intended to secure assurances that Musk's political involvement would decline. In an interview with Bloomberg last week, board chair Robyn Denholm said the board expects Musk to be "back, front and centre" at Tesla and called him "the right CEO for Tesla over this transformative period of time," while adding that "what [Musk] does from a personal perspective in terms of his political motivations, et cetera, is up to him."

Investors reacted to the share purchases with an immediate boost to Tesla's market value, but the company continues to face questions about execution, competitive pressures and the implications of its chief executive's public profile. The long-term effects of the board's compensation proposals and any resulting shifts in ownership or strategy will depend on future performance and regulatory and shareholder scrutiny.