Tesla shares sale

Elon Musk, Tesla's CEO and the richest man in the world, according to regulatory filings, sold more than 4.5 million Tesla shares this week, raising about $5bn. Tesla's share price plummeted on news of the sale of a large 10% stake, but has already recovered partially.

Tesla (TSLA) shares, up 160% over the last 12 months, fell sharply this week on Monday and Tuesday (down 16.2% in two days), but were up 4.34% on Wednesday.

The auto maker's share price rebound came after investors received an explanation for a major sale of Tesla shares by CEO Elon Musk. In addition to him, several insiders (major shareholders and Tesla executives) have made a number of large sales recently.

Elon Musk sold more than 4.5 million Tesla shares for about $5 billion. He still owns more than 166 million shares, but according to announced plans, Musk may sell a 10% stake in Tesla.

Market experts have warned investors that Tesla's share price could fall in the short term, given the large insider sales and the previous strong performance of those shares.

That said, Musk's main argument for selling the shares was his liability to pay taxes on the profits from the sale of his stock options, which are paid to him in lieu of his traditional salary. Regulatory documents filed with the Securities and Exchange Commission (SEC) show that Musk initiated these sales as early as 14 September this year.

Tesla growth projections

Tesla chairman Robyn Denholm said: "The world has already passed the tipping point in the renewable energy transformation, and we have the technology we need to succeed, but we need to accelerate it at an incredible pace."

Denholm said Tesla aims to produce 20 million electric vehicles annually by 2030 and is looking to expand into new markets. Analysts point out that in addition to ramping up production at a record pace, Tesla has managed to improve margins, and the company is also leading the way in unmanned car technology.

In the first three quarters of 2021, Tesla sold more than 627,000 electric vehicles, taking 21.5% of the market 7% more than its nearest competitor. Tesla's manufacturing efficiency also sets the company apart, as evidenced by its operating margin of 14.6% in the most recent quarter. By comparison, Volkswagen, General Motors (GM) and Ford Motor (F) had operating margins of 4.6%, 6.1% and 7.5% respectively.