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Tesla’s Senior VP Tom Zhu has sold 82% of his stock in the company. He has every right to sell his shares, of course, as they are an important component of his overall pay package. Yet the act of selling a significant percentage of this Tesla stake seems a symbol of unrest within the organization. Is the company’s pivot to autonomy, AI, and robotics viable? If it is, then why sell so many shares now? Is there disagreement that the company’s already successful electric vehicle business is no longer the primary focus? Is there a high level of executive discontent with the company? Or do they just know something that we don’t?
These questions have led to disquiet in cyberspace. Do the stock sales by Tom Zhu — and other execs and board members at Tesla — indicate insider trading? The mere thought raises serious questions about the company’s future prospects in light of regulatory changes and financial challenges.
Tesla’s strategic direction has been amorphous for several years. Once CEO Elon Musk’s attention wandered to Twitter/X, his other businesses, and politics, Tesla seemed to be rudderless. Are Zhu’s sales an indication that it’s time to challenge the omnipresent investor faith in Tesla’s stock? Are Zhu and other Tesla insiders using insider knowledge to an unfair — and illegal — advantage?
What is Insider Trading?
“Insider trading” starts with information available strictly to individuals who are employed by a company or who have access to company information due to their ancillary roles in the company. These persons can be everyday workers or executives, attorneys or accountants, or others. After these individuals, market professionals stand to benefit from insider trading. That’s because brokers, securities analysts, institutional investors, and the like hold a real advantage over public investors in collecting and analyzing information.
Insiders have information that others don’t about company trends, policies, and legal scrutiny, for example, so that they can anticipate potential challenges or volatility in market conditions.
What signs of insider trading seem to be emerging from Tesla? It’s not a secret that many Tesla yuckity-yucks have sold lots of their shares.
CFO Vaibhav Taneja has repeatedly sold stock throughout the first half of 2025. In June, he sold about $3 million in shares across multiple transactions, offloaded approximately $1.2 million in a July 7 transaction, and the next day he sold $587,880 more on July 8.
Board chair Robyn Denholm’s remuneration with Tesla is pre-arranged so as to give her the flexibility to exercise equity options, and she has done so robustly. Denholm sold 112,390 shares worth $35 million just weeks after Tesla stock value rose post-Trump re-election. She sold the same amount of stock again on December 2, February 3, March 3, and at the end of April. These sales have amounted to $558 million worth of stock since 2020, according to data compiled by Bloomberg.
Denholm has stated openly that this fortune she has been able to build through her position at Tesla has been “life-changing.” Yet, with such close ties to Musk, Denholm and the other board members were cited by the judge who last year rejected Musk’s $55 billion compensation package, saying they lacked oversight independence.
The intense pattern of Tesla share sales by insiders has many people concerned about exactly how robust the company is.
Reasons for Closer Scrutiny of Tesla’s Financial Health
What is going on behind the scenes at Tesla? Has the company abdicated its fiduciary duty? For a long time, Tesla has been showing signs of weakening consumer demand.
Questions of board accountability have made the headlines, but so, too, have concerns about the company’s capital allocation discipline. The combination is unsettling at best. Clyde Morgan on AI Invest outlined a series of markers that point to distress behind Tesla’s closed doors.
- Full Self-Driving (FSD) software has made little progress since CEO Elon Musk’s promise to deliver “Level 5 autonomy by year-end.” Instead, beta FSD has met with significant regulatory scrutiny.
- Robotaxi production woes mark another of Musk’s failed promises. Instead of a million robotaxis by 2024, Tesla has been stymied by short-term production woes instead of a keen focus on software integration.
- xAI integration seems to have resources misallocated, so that, instead of a means to accelerate autonomy and energy systems, it is another tempting product stuck in Tesla development hell.
Even the relatively inconsequential disappointment in the Cybertruck seems to have ripple effects these days, as owners report that insurance companies are now canceling policies for the vehicle.
As if these signals weren’t troubling enough, the Republican-led Congress recently passed the infamously named Big Beautiful Bill, which is designed to eviscerate environmental forward progress. Among the changes will be a phase-out of the carbon credit scheme that Tesla has drawn upon for considerable revenue. Carbon credit sales had given Tesla a boost as new EV models merged onto the scene and threatened Tesla industry dominance.
Elon Musk continues to skew the Tesla marketplace and share value. It’s clear that under Musk’s control Tesla has struggled mightily in the transition from a visionary pioneer to a reliable producer of cars in high volume. Even though he poses a leadership risk, Musk’s new pay package means he will own nearly 16% of Tesla, or the equivalent of $150 billion. That’s a sizeable influence on the direction of the company.
Competition has heated up dramatically in China, notes our CleanTechnica editor, Zachary Shahan. He opines that “it’s not going to get any weaker. Arguably, Tesla needs new models, not just new trims of old models.” BYD has already passed Tesla in sales of full electric vehicles, with no slowing evident for the near future.
All in all, investors need to be comfortable with Tesla’s high valuation. Tesla’s autonomous driving tech is being valued much more highly than $19 billion across all the investors. Tesla depreciation is killing demand for new versions. Tesla robotaxis are about a decade late.
Tesla is trending in the wrong direction.
It would make sense for Tesla to reinvigorate its core business operations. Morningstar equity analyses had already pointed to Tesla’s uncertainty following the Trump Administration’s elimination of EV sales credits beginning September 30. For any other company, such a hit — compounded by carbon credit losses — would mean a requisite series of remedial strategies to assure investors of sustainable growth.
Will Tesla fall into the traditional line? Meanwhile, will Tesla insiders continue to benefit from stock sales from this publicly-held company?
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