According to a regulatory filing, Musk acquired 2.57 million Tesla shares last week through The Elon Musk Revocable Trust, spending close to $999 million at prices between $371.90 and $396.36 per share. 

This is his first open-market purchase since 2020, a move analysts interpret as both a vote of confidence and a calculated step to strengthen control ahead of an important shareholder meeting in November.

With this acquisition, Musk’s trust directly holds 96 million Tesla shares and indirectly controls more than 413 million, tightening his grip on the company as it prepares to vote on a proposed $1 trillion performance-based compensation package. 

The plan, set for 6 November, ties Musk’s payout to extraordinary milestones such as delivering 20 million vehicles, reaching an $8.5 trillion market cap, and deploying one million robotaxis and humanoid robots. If approved, Musk’s stake could rise to as much as 29%.

Tesla’s stock closed at $395.94 on Monday, up 7.36% and reversing its year-to-date decline of around 2%. Options activity also spiked, with more than 120,000 contracts trading around the $360 strike price, reflecting heightened bullish sentiment despite lower implied volatility. The rally extends a rebound in September, lifting Tesla’s shares nearly 10% month-to-date.

Still, the company’s operational realities are fraught. Global EV sales are down 10% this year. Europe has seen a sharp 40% decline, while China has slipped 6%. In the U.S., temporary strength is being fuelled by consumers rushing to take advantage of the $7,500 federal tax credit before it expires. 

Tesla’s American market share dropped to 38% in August, the lowest in eight years, a contrast to the 80% it held in 2020. Analysts warn that the third-quarter gains may prove short-lived once incentives fade.

Internally, there have been questions over Musk’s political involvement and its effect on Tesla’s brand. Board chair Robyn Denholm objected these concerns on Friday, saying: “It’s up to him” and adding that Musk is now “front and center” at Tesla after several months at the White House.

The company’s decline is being driven by both falling demand for electric vehicles, leadership controversies, and a public row between Elon Musk and former U.S. President Donald Trump.

Tensions reached a breaking point when Musk, Tesla’s CEO, openly criticised Trump’s tax and spending agenda on X, the social media platform he owns. Trump retaliated on Truth Social, warning that federal contracts with Musk’s companies could be cancelled. 

That single threat sent Tesla shares down more than 14% on Thursday alone, the company’s worst one-day loss since 2020. Short sellers raked in an estimated $4 billion in profits from the collapse, according to Ortex data.

Tesla began the year ranked eighth globally by market capitalisation but has now fallen to tenth. The electric carmaker’s valuation has slumped to $917 billion, dragging it further down the leaderboard of global tech giants.

TD Cowen, a research firm, says the political fallout is creating fresh risks for Tesla’s U.S. sales. “35% of Tesla’s U.S. sales occur in Republican-leaning counties, 12% of which it classifies as ‘Deep Red.’ Of the 65% in Democratic areas, 36% are ‘Deep Blue.’” 

With Musk openly feuding with Republican leadership, analysts are concerned that political issues could hurt demand in key markets.

Meanwhile, Goldman Sachs has trimmed its price target for Tesla from $295 to $285, pointing to weakening deliveries across China, Europe, and the United States. The bank now expects Tesla to deliver just 365,000 vehicles in the second quarter, down from 410,000 and has maintained a ‘Neutral’ rating on the stock.

Some investors are still optimistic. TD Cowen kept a ‘Buy’ rating on Tesla, with a price target of $330, but warned that “Thursday’s events have created a higher degree of near-term uncertainty.”

The White House is reportedly attempting to calm the situation, with aides scheduling a call with Musk in a bid to ease political tensions. That news gave Tesla a brief lift on Friday, with shares rising up to 4% in pre-market trading.

Elsewhere in big tech, Apple has slipped from the top spot, falling to third place this year due to soft demand in China and renewed trade tensions. Its valuation has dropped more than 20%, landing at $2.99 trillion. Microsoft now leads the pack, driven by strong enterprise demand and adoption of its AI-powered tools.

Investor trust in Tesla has always been tied to Musk’s leadership, but that leadership has become more politically divisive and the market is reacting with caution and with retreat.