Tesla CEO Elon Musk made a significant charitable contribution just before the new year, donating 268,000 Tesla shares, valued at approximately $108 million, to unnamed charities, according to a regulatory filing released on Tuesday as per a Reuters report.
This philanthropic gesture, framed as part of his “year-end tax planning,” follows a pattern of similar donations from previous years, indicating a recurring strategy of using stock to support charitable causes.
Philanthropy as part of tax strategy
The filing indicated that the beneficiaries of Musk’s generosity are “certain charities” that have “no current intention to sell such stock,” suggesting a longer-term philanthropic focus.
This donation echoes similar moves in 2022, when Musk donated Tesla shares worth $1.95 billion, and in 2021, when he donated around $5.74 billion to his non-profit organization, the Musk Foundation.
The Musk Foundation, where Musk serves as president, allocates grants to various causes, including “the development of safe artificial intelligence to benefit humanity,” according to its website.
Musk, currently ranked as the world’s richest person with a net worth of $408.3 billion according to Forbes, did not immediately respond to a Reuters request for comment on the latest donation.
Tesla’s sales figures: a mixed picture
This charitable donation comes at a time when Tesla’s sales performance is under scrutiny.
While global sales rose 2.3% in the fourth quarter, this follows a sluggish start to the year, which contributed to the electric car company’s first year-over-year sales decline since at least 2015.
The annual decline for the Austin, Texas, company came despite offers such as 0% financing, free charging and low-priced leases.
Tesla delivered 495,570 vehicles from October through December, bringing deliveries to 1.79 million for the full year.
However, this was 1.1% below 2023 sales of 1.81 million, indicating a slowdown in overall demand for electric vehicles in the US and globally.
Factors impacting Tesla’s performance
The fourth-quarter boost in deliveries came at a cost, with analysts polled by FactSet expecting Tesla’s average sales price to fall to just over $41,000 in the quarter – the lowest in at least four years.
This price drop raises concerns about Tesla’s fourth-quarter earnings, which are scheduled to be announced on January 29th.
Tesla had previously predicted 50% annual sales growth, but has struggled to maintain this pace due to an aging model lineup and increased competition from rivals in China, Europe, and the US
In the US, early adopters of electric vehicles are largely saturated, while mainstream buyers continue to express concerns about range, price, and the availability of charging stations on longer journeys.
Tesla’s tightrope walk
Tesla shares fell by 5.2% in early Thursday trading, despite being up more than 50% over the last 12 months, surging with the election victory by Donald Trump.
The falling sales early in the year led to unprecedented discounts from the automaker, which impacted its industry-leading profit margins.
Competition from both established and emerging automakers is also increasing, posing a threat to the company’s market share.
The majority of Tesla’s sales came from the more affordable Models 3 and Y, with only 23,640 of its more expensive models, including X, S, and the new Cybertruck, being sold.
While Tesla’s global electric vehicle sales edged out Chinese rival BYD, which announced a 41% increase in EV sales to 1.77 million last year, the company is facing stiff competition for the top spot.
Fourth-quarter production of 459,445 vehicles was below total deliveries for the quarter, and full year production of 1.77 million was less than the year’s sales.
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