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Tesla shares jumped more than 6% on Monday after Elon Musk announced he had purchased approximately $1 billion (£735 million) worth of the company's stock. The move by Musk, who already held a 13% stake, is being seen as a strong signal of confidence in the electric car maker, which has struggled to gain ground this year, especially with its plans to invest in robotaxis, automation and artificial intelligence (AI).
The company's board recently proposed a compensation plan valued at roughly $1 trillion, which would grant Musk up to 12% of the firm's shares if the company reaches certain targets. The board also said it would grant him $29bn worth of shares last month as a separate "interim" award, after a larger pay package agreed in 2018 was struck down in a court battle.
The proposals followed discussions with Musk, in which he demanded a 25% stake in the firm, at times threatening to quit Tesla entirely over the issue.
Musk's purchases of roughly 2.5 million shares were completed on Friday and disclosed in a filing with regulators on Monday. They mark his first open market stock purchases since 2020 and are a sign of his investment in the firm, which has been on the defensive this year.
Musk has tried to focus investors on the promise of robotaxis and automation. But the company is grappling with falling sales, as competition heats up and the US ends tax breaks for electric car purchases.
The firm's brand also took a hit as Musk has deepened his political involvement. He was a key supporter of US President Donald Trump in the 2024 election, before a dramatic falling out earlier this year. He has also rallied on behalf of far-right causes in the UK and Germany.
On Monday, the British government accused Musk of using "dangerous and inflammatory language" when he appeared by video link at a rally organised by far-right activist Tommy Robinson in London on Saturday.
Musk had told the crowds that violence was coming and they had to fight back or die.
Tesla's board has said its compensation plans for Musk are intended in part to secure assurances that his "involvement with the political sphere would wind down in a timely manner".
