Elon Musk sells a further $1bn in Tesla shares to pay his huge tax bill

Business tycoon Elon Musk has offloaded another $1billion of shares in electric car and clean energy giant Tesla, filings published by US financial authorities have shown.

It means the world’s richest man has sold $16.4billion in Tesla stock since early November when he polled his Twitter followers on whether he should sell 10 per cent of his holding in the business.

Much of the sale has been motivated by Musk’s need to pay a gigantic tax bill of around $11billion, estimated by some to be the largest individual tax bill in US history concerning an exercise of stock options.

Big selloff: Elon Musk has sold $16.4billion in Tesla stock since early November when he polled his Twitter followers on whether he should sell 10 per cent of his holding in the business

Musk’s filings with US Securities and Exchange Commission yesterday also showed that he had purchased about 1.6 million shares in the carmaker at a strike value of $6.24 per share granted under the remuneration package.

He said last week in an interview with conservative satirical website Babylon Bee that he had sold ‘enough stock’ to hit the 10 per cent goal, but he admitted that some stock options expiring next year would have to be exercised ‘no matter what’.

These options derive from a compensation plan that The Boring Company founder earned back in 2012 when the firm was worth just over $3billion compared to more than $1trillion today.

Another 5.4 million shares may have been sold by him as a means of cashing in on Tesla’s booming stock price, which has grown by around 50 per cent this year and more than twelvefold since the start of 2020.

This has come about following the soaring increase in demand for the company’s vehicles during the pandemic, especially its Model 3 and Model Y cars.

Combined with soaring revenues at his space travel firm SpaceX, which became the first business to send humans into orbit and to the International Space Station last year, this has helped his net worth skyrocket to $278.9billion.

Surging sales: Tesla’s share price has soared in the last two years as demand for its vehicles has soared during the pandemic, especially its Model 3 and Model Y cars

However, he made headlines in June when an investigation by ProPublica revealed that Musk, like many other billionaires, paid little in federal income taxes to US authorities.

ProPublica estimated that while his wealth jumped by $13.9billion from 2014 to 2018, he paid an ‘effective tax rate’ of 3.27 per cent. It additionally found that he paid no federal income tax in 2018.

Responding to criticism from US senators such as Elizabeth Warren, who accused him of ‘freeloading,’ Musk claimed in his recent Babylon Bee interview that the reason he paid no tax that year was that he earned no income.

He also decried the state of California as the land of ‘overregulation, overlitigation, overtaxation’ and a place where it was ‘increasingly difficult to get things done’. 

Tesla’s headquarters moved from Palo Alto in the heart of Silicon Valley to Texas’s capital city Austin at the start of this month.

California’s highest state income tax rate is 12.3 per cent on those earning at least $625,370 a year, but Texas does not have any state income tax.

This post first appeared on Dailymail.co.uk