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Tesla (TSLA) is arguably among the most popular and most polarizing companies of all time. It is an important company, as it has led the electric vehicle (EV) transition in the automotive industry. Once dismissed as a niche by automakers, EVs are now at the forefront of almost all the legacy automakers’ business strategies, thanks to Tesla's success - and its humongous market cap, which surpassed $1.2 trillion at the peak.
The brand Tesla is closely interwoven with its CEO Elon Musk, who also has interests in multiple other companies. So, how much influence does Elon Musk really have on Tesla? Here’s everything you need to know about Tesla’s ownership makeup, plus the different companies that Musk owns.
Tesla’s History: Musk Wasn't a Co-founder
Tesla is a public company, owned by shareholders, with Musk himself being the largest. Even though Tesla and Musk are almost synonymous by now, the billionaire did not originally start Tesla; it was Marc Tarpenning and Martin Eberhard who founded the company in 2003.
The company is, of course, named after Nikola Tesla – the Serbian-American inventor who was a rival of Thomas Edison. Tarpenning and Eberhard founded Tesla as a pure-play EV company to produce electric cars, beginning with a sports car named the Roadster. Musk was among the initial investors of Tesla, plowing $30 million into the company and becoming its chairman in 2004.
In 2007, Eberhard resigned as CEO, and by the next year Tesla announced that he had left the company altogether. Tarpenning also stepped down from Tesla in 2008, and Musk became the company’s CEO. Two years later, the company went public at $17 per share.
Since then, TSLA has undergone two stock splits, and its split-adjusted IPO price is just over $1 per share. At its current levels around $224, the stock has since delivered some of the most impressive post-IPO returns ever - not only outperforming the S&P 500 Index ($SPX), but creating tremendous wealth for early investors in the process.
Tesla Stock Takes a Volatile Ride
Tesla stock has been quite volatile on the way to those long-term returns. TSLA jumped 740% in 2020, and gained another 50% in 2021. The stock did fall 65% in 2022, but has almost doubled in 2023. Over the last few months, Tesla has been in the news over its frequent price cuts; the most recent one happened just last week.
Tesla’s price cuts have been a negative for overall industry profitability, and the automaker's own operating profit margin fell below double digits to hit 9.6% in Q2. Many smaller automakers have been pressured to lower vehicle prices amid the Tesla-initiated price war, and Ford (F) even scaled back its ambitious EV pivot.
Tesla has also been in the news amid the deals it has signed with multiple automakers, including Ford and General Motors (GM), to share its sprawling Supercharger network.
Elon is Tesla’s CEO and De Facto Marketing Head
Musk was Tesla’s CEO and chairman until 2018, but stepped down from his role as chairman as part of an SEC settlement over his controversial “funding secured" tweets. As CEO, he is closely involved in new product development and autonomous driving.
Notably, Tesla does not have a marketing and advertisement department. Musk himself doubles up as the de facto marketing head for the company, and leverages his platform on Twitter (now X) to market Tesla products and services, and to promote EVs in general.
Who Owns Tesla?
Elon Musk is Tesla’s biggest shareholder, and holds over 411 million shares for a 12.95% stake in the company – currently valued at just under $90 billion. Among insiders, Musk’s brother and TSLA board director Kimbal Musk owns around 1.6 million shares, estimated to be worth around $346 million.
Zachary Kirkhorn, who recently stepped down from his role as the CFO of Tesla, has a beneficial ownership of around 2.7 million shares, and amassed Tesla holdings worth nearly $590 million during his stint at the company.
Over the last couple of years, Musk also unlocked billions of dollars in Tesla shares under his compensation plan. Notably, Musk does not take any fixed salary or bonus from the company, and earns only ESOPs. That said, despite having unlocked shares, Musk's stake in the company has come down due to his frequent stock sales – including a $23 billion sale in 2022 to fund his Twitter acquisition.
Looking at the external shareholders, as is the case with so many listed companies, Vanguard is the biggest institutional shareholder with a 6.97% stake, followed by BlackRock at 5.9%. State Street, Geode Capital Management, and Capital World Investors round out the top five institutional Tesla shareholders.
Scotland's Baillie Gifford management firm is also among the top Tesla shareholders, with a stake in the company valued around $5 billion. Meanwhile, Cathie Wood’s ARK Invest holds around $1 billion in Tesla shares. Wood, a vocal Tesla supporter, expects the stock to rise to $2,000 per share by 2027 under her base case scenario.
What Other Companies Does Elon Musk Own?
Elon Musk is closely associated with Tesla, and the spike in its valuations catapulted him to the position of world’s richest person – and he also became the first person ever to surpass a net worth of $300 billion, in November 2021. However, after Tesla's recent slide, his net worth is approximately $218 billion. He also owns, and has interests in, several other companies. These include:
- X: Last year, Musk acquired the social media platform Twitter, now known as X. He owns the bulk of the shares, even as some other investors - including Twitter co-founder Jack Dorsey - retained their holdings after Musk took the company private.
- SpaceX: Musk also owns 42% of SpaceX, which manufactures and launches rockets and spacecrafts. SpaceX is privately held, and is the most highly valued among the privately held companies that Musk owns.
- The Boring Company: Musk also owns The Boring Company, an engineering firm working on the hyperloop transportation system. Musk famously argued that his hyperloop was a better option than California's high speed rail project, but the state proceeded with funding for the rail project.
- Neuralink: Musk also owns the neurotechnology company Neuralink, which is developing a fully implantable brain-computer interface.
- xAI: Earlier this year, Musk also started his AI company, xAI. He was previously among the backers of ChatGPT’s parent company, OpenAI, but cashed out. Musk has been quite critical of OpenAI lately, and launched xAI to take on the likes of ChatGPT and Google’s Bard.
Apart from these companies, Musk also cofounded PayPal (PYPL), which was later sold to eBay (EBAY) in 2002.
While all of Musk’s companies are ambitious in their goals to solve pressing problems like global warming, congested city roads, space exploration, and more - and appear well-placed for the future - Musk continues to be a polarizing figure. The CEO's antics since his Twitter acquisition have only widened the divide between his fans and haters. Don't be surprised to see that reflected in continued share price volatility; despite the stats outlined above, the average retail investor still holds a commanding stake in Tesla stock.
On the date of publication, Mohit Oberoi had a position in: F , GM . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
