MIC Tesla Cars Cross 54,000 Sales Mark; Stock Bleeds After Elon Musk’s Twitter Poll

China Passenger Car Association (CPCA) said on Monday that Elon Musk-led company Tesla Inc Tesla, Inc. $TSLA: $1,162.94(-4.84%), in the month of October sold 54,391 China-made vehicles in which 40,666 cars were exported.

U.S. electric vehicle and clean energy company which manufactures Model 3 sedans and Model Y sport-utility vehicles in Shanghai, sold 56,006 China-made vehicles in September, of which 3,853 were exported. A decline of 2.97% was reported in last month’s sales compared to September’s figures.

The sales volume in China in October stood at 13,725 units, almost down by 74% from September’s sales of 52,153 units. On the other hand, there has been a rapid increase of 955.44% in exports in October. Its exports in the month exceeded 40,000 vehicles for the first time, far ahead of exports in September which stood at 3,853 vehicles.

China’s domestic leading EV makers– Nio Inc NIO Inc. $NIO: $43.20(2.15%) sold 3,667 cars last month, while Xpeng Inc managed to deliver 10,138 vehicles.

Volkswagen AG said its ID. series EVs sales were above 12,000 in China in October.

CPCA said passenger car sales in the previous month in China totalled 1.74 million, which dipped 14% from a year-earlier period.

On one hand, where Tesla posted an impressive increase in exports of its Shanghai Gigafactory manufactured cars, the stock, on the other hand, is in reverse gear.

Tesla shares slid more than 4% during pre-market trading hours on Monday after CEO Elon Musk asked his 63 million followers on Twitter whether he should be disposing of 10% of his stock in the electric vehicle company, adding, “I will abide by the results of this poll, whichever way it goes.”

Tesla

Shares of Tesla came down to $1,170 at 8:19 a.m. ET Monday, fell 4.2% from its previous close of $1,222.09 on Friday. Earlier, in pre-market trade the stock plummeted more than 7%, registering its pre-market low of $1130.5.

The impact of the poll on the social engagement for the stock amongst the users of Twitter and Reddit on the dashboard of Quantale will be printed as the day proceeds. On Friday, the social engagement for the stock amongst the users of Twitter and Reddit rose more than 50% from its previous day combined with an increase of 0.15% in the trading volume. Today, the stock opened the market at $1149.79, down 5.91% from its previous day’s close.

On Saturday, in a Twitter poll, Musk asked: “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?”

His followers had to answer in “Yes” or “No”. 3,519,252 people voted, of which 57.9% of them favoured selling the stake.

Musk previously stated that he planned to sell “a large block” of his stock in the fourth quarter.

Musk would have begun selling millions of shares this quarter regardless of the result of the Twitter vote as a tax bill of more than $15 billion is awaiting shortly.

In 2012, Elon Musk was awarded options as part of a compensation plan. Since he doesn’t take a salary or cash bonus, stock awards and the gains in Tesla’s share price are his main source of wealth. The 2012 award was for 22.8 million shares at $6.24 per share.

Musk has taken out loans using his shares as collateral, the firm has recently disclosed. With the sales, Musk may desire to return some of those debt commitments.

Tesla in its third-quarter Securities and Exchange Commission 10-Q filing this year noted that “If the price of our common stock were to decline substantially, Mr Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock to satisfy his loan obligations if he could not do so through other means. Any such sales could cause the price of our common stock to decline further.”

The options expire in August 2022. Musk is liable to pay the income tax on the gain. Since the options were issued and mainly earned while Musk was a California tax resident, he is subjected to the state’s top income tax rate of 13.3 percent. Musk’s options will be taxed at a combined state and the federal tax rate of 54.1%, plus the 3.8% net investment tax, equating to about US$ 15 billion.