Tesla: Top Shareholders and Capital Structure
When it comes to sustainable automotive engineering, Tesla is the most well-known brand. It is also the first manufacturer of luxury electric cars that targets the mass market and offers affordable prices. Beyond vehicles, Tesla’s offerings extend to solar energy solutions and energy storage systems, ensuring an integrated approach to renewable energy.
With sales outlets and galleries worldwide and manufacturing facilities in the U.S., Germany, and China, Tesla maintains a significant presence in Asia Pacific and Europe. This article aims to give you insights into how Tesla manages its network of shareholders and capital structure in the following sections.
About Tesla
In 2003, two brilliant engineers, Marc Tarpenning and Martin Eberhard, came together to create Tesla—the iconic company named after the legendary inventor Nikola Tesla. This visionary team drew inspiration from Nikola Tesla’s groundbreaking research on spinning electromagnetic fields in the 19th century.
Tesla has become synonymous with Elon Musk, but Musk joined the firm a full year after it had already begun operations. After contributing $30 million to Tesla, he rose to the position of chairman of the board and, a few years later, assisted in raising capital from the founders of Google.
The first electric automobile produced by Tesla, the Roadster, had its prototype presented in 2006 and went into production in 2008. Sales of 500 Roadsters at $98,000 each were made through June 2009.
Launched in 2017, the Model 3 was Tesla’s entry into the mass market. By 2020, it had surpassed all other plug-in electric cars in popularity; by 2021, it had sold about 501,000 units globally. Tesla surpassed its delivery benchmark between January and March of 2022 when it sold over 310,000 vehicles.
Tesla Models
As of November 2023, Tesla products include six different types of cars. The original Tesla Roadster, the company’s flagship model, is no longer manufactured or marketed. Tesla will also produce a second-generation Roadster. Let’s look at the most prominent models.
Tesla Model S
The Tesla Model S is a premium full-size car with a liftback design. It has dual motors that operate the all-wheel drive system. Development of this model began before 2007, with the first deliveries in June 2012. It underwent two significant redesigns: the first in April 2016, which revamped the front end, and the second in June 2021, which focused on a comprehensive interior overhaul.
The Model S became the most purchased plug-in electric vehicle globally in 2015 and 2016, with sales surpassing 250,000 units by December 2018 (when Tesla began combining the sales figures of the Model S and Model X).
Tesla Model 3
As a more accessible alternative to the Model S, the Tesla Model 3 is a mid-size fastback car available in configurations with dual-motor all-wheel drive or single-motor rear-wheel drive. The unveiling of the Model 3 prototype in 2016 resulted in over 325,000 reservations within just a week. Tesla started delivering this model in July 2017.
From 2018 to 2021, the Model 3 was the world’s best-selling electric car, reaching a milestone of one million units sold by June 2021. It received a major design update in September 2023, including changes to its exterior and interior.
Tesla Model Y
Designed more economical than the Model X, the mid-size crossover SUV Tesla Model Y is available in configurations that seat five or seven passengers. It offers options for a single-motor rear-wheel drive or a dual-motor all-wheel drive system. Approximately 75% of the Model Y’s components are shared with the Model 3, which helped streamline production.
The prototype was revealed in March 2019, and Tesla began shipping the Model Y in March 2020. By the first quarter of 2023, the Model Y had surpassed the Toyota Corolla in sales, becoming the top-selling car worldwide and marking the first time an electric vehicle achieved this feat.
Organizational Structure
As a top manufacturer of one of the most-wanted cars in the world, Tesla has had to tweak its marketing and sales strategies to balance its production capacity with its constant need to generate new ideas. The organization is set up in a functional, or U-structure, with worldwide functional centers that handle all business operations.
These functional hubs consist of the offices of the chairman (Larry Ellison) and chief executive officer (Musk), as well as technology, design, engineering, sales, finance, and marketing. They are all organized hierarchically, with reporting lines extending from managers to assistants.
The company’s primary divisions are Automotive and Energy Generation, with smaller divisions in the United States, China, and other important countries. The functional centers serve these divisions.
The company’s US-based headquarters are located in Palo Alto, California, where they oversee and supervise all business sections. With this corporate structure, the company’s managers can monitor operations worldwide. This facilitates streamlining procedures and the transmission of strategic guidance from upper management via the organizational hierarchy.
This table presents an overview of Tesla’s executive management.
| Name | Designation |
|---|---|
| Elon Musk | Chief Executive Officer |
| Zachary J. Kirkhorn | Chief Financial Officer |
| JB Straubel | Chief Technology Officer |
| Vaibhav Taneja | Chief Accounting Officer |
| Jerome Guillen | President, Heavy Duty Trucking |
| Andrew Baglino | SVP Powertrain and Energy Engineering |
| Bill Berry | Vice President, Litigation |
| Laurie Shelby | Vice President, Environmental, Safety, and Health (ESH) |
| Kam Budhiraj | Vice President, Supply Chain |
| Lars Moravy | Vice President, Vehicle Engineering |
| Lothar Thommes | Vice President and Managing Director, Tesla Automation |
| Troy Jones | Vice President, North America Sales |
| Valerie C. Workman | Vice President, People |
Tesla market and share success
In 2023, Tesla emerged as the leading manufacturer of battery electric passenger vehicles globally, capturing a market share of 19.9%. The company announced a remarkable 38% increase in vehicle deliveries from the previous year, totaling 1.8 million units.
By March 2024, Tesla celebrated the production of its six millionth vehicle. Although BYD briefly surpassed Tesla in electric vehicle shipments in the fourth quarter of 2023, Tesla reclaimed its position as the top EV manufacturer in the first quarter of 2024.
Tesla’s capital structure
Tesla’s capital structure has evolved significantly over the years, shifting from a heavily debt-reliant model to a more balanced approach.
Here’s an overview of Tesla’s current capital structure:
This capital structure reflects Tesla’s financial maturity and success. The company has transitioned from a capital-intensive growth phase, characterized by high debt levels, to a more stable financial position with a balanced mix of debt and equity. This shift allows Tesla to maintain financial flexibility while reducing interest expenses and financial risk.
Tesla’s Top 3 Individual Insider Shareholders
Anyone with more than 10% ownership in the company’s shares, including senior management, board members, and executives, is considered an insider. Here are Tesla’s top individual insider shareholders in the Tesla cap table.
- Elon musk – Tesla’s CEO, Elon Musk, is the company’s largest individual shareholder. As of the end of December 2023, Musk holds approximately 715 million shares, representing nearly 23% of all issued Tesla shares. His investment is significantly larger than any other individual shareholder. Musk’s roles extend beyond Tesla. He also leads SpaceX, Neuralink, and The Boring Company and co-founded PayPal Holdings, Inc. (PYPL). With a net worth of about $205 billion, Forbes lists him as the second-richest person globally.
- Kimbal Musk – Elon’s younger brother, Kimbal Musk, owns around 1.6 million shares of Tesla, which is less than 1% of the company’s total shares. In addition to his stake in Tesla, where he serves on the Board of Directors, Kimbal is an entrepreneur involved in the restaurant industry and the food sector with The Kitchen. He also holds positions on the boards of Chipotle Mexican Grill, Inc. (CMG) and SpaceX.
- Jeffrey Straubel – Jeffrey Straubel, Former Chief Technology Officer at Tesla, holds about 276,000 shares, valued at roughly $55 million, constituting less than 0.01% of Tesla’s total shares. After transitioning to an advisory role in 2019, Straubel leads Redwood Materials and has been involved with other significant ventures like SolarCity and QuantumScape.
Top 3 Institutional Shareholders
With about 41.87% of the total shares outstanding, institutional investors own a significant amount of Tesla shares. Let’s look at Tesla’s top institutional shareholders in the Tesla cap table.
As of the latest filings, Vanguard Group possesses nearly 230 million Tesla shares, which account for about 7.2% of all outstanding shares, translating into a valuation close to $46 billion. This substantial investment is managed through various mutual funds and ETFs, with the Vanguard Total Stock Market Index Fund being a notable holder. Vanguard manages around $7.6 trillion in total assets.
Holding 188 million shares, BlackRock controls about 5.9% of Tesla’s total shares. These shares are primarily invested on behalf of clients through ETFs and mutual funds, including the iShares Core S&P 500 ETF. BlackRock, the world’s largest asset manager, oversees approximately $9.4 trillion in assets.
With 108 million shares, State Street holds about 3.4% of Tesla’s total shares as of December 2023. Known for its SPDR S&P 500 ETF Trust, State Street has $3.7 trillion in assets under management, marking it a key institutional player in Tesla’s investment landscape.
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