Saudis backed taking Tesla private: Musk

Elon Musk has testified that he was sure he had backing from Saudi investors in 2018 to take his electric car maker Tesla Inc private and could have used his stake in rocket company SpaceX to fund a buyout.

At a trial in San Francisco federal court on Monday, the billionaire, who said he was tired from a lack of sleep, spoke quietly and calmly during roughly five hours of testimony.

"With SpaceX stock alone, I felt funding was secured" for the buyout, he told a jury, referring to the aerospace company where he is also CEO, without giving any details.

But Nicholas Porritt, the plaintiff investors' lawyer, raised doubts about whether he had been looking to use his SpaceX stake to fund the deal, which would have increased his stake in Tesla.

Porritt pointed out that Musk had told Tesla employees at the time he expected his stake in Tesla to remain similar after the deal.

Musk is defending against claims he defrauded investors by tweeting on August 7, 2018, that he had "funding secured" to take Tesla private at $US420 ($A598) per share, and that "investor support is confirmed".

Musk added later that he chose not to take Tesla private due to a lack of support from some investors and a wish to avoid a lengthy process.

Tesla's stock price surged after Musk's 2018 tweets, only to fall as it became clear the buyout would not happen.

Investors say they lost millions of dollars as a result.

Musk told Porritt he met with representatives of Saudi Arabia's sovereign wealth fund, the Public Investment Fund, at Tesla's factory in Fremont, California on July 31, 2018.

He acknowledged a takeover price was not discussed, but said the Saudi representatives made clear they would do what it took to make a buyout happen.

That never came to pass, Musk said, because the fund's governor, Yasir Al-Rumayyan, later backpedaled on the commitment to take Tesla private.

"I was very upset because he had been unequivocal in his support for taking Tesla private when we met and now he appeared to be backpedaling," Musk said.

Lawyers for Al-Rumayyan did not immediately return a request for comment.

Porritt later told the court that written evidence did not support Musk's claim about the Saudis' original intentions, saying minutes of their meeting showed the Saudis wanted to learn more about what Musk had in mind.

Musk later testified he would have sold his stake in SpaceX to fund the go-private deal, as he sold part of his Tesla stake to help fund his bid to take Twitter private last year.

He is expected to continue on Tuesday with a third day of testimony.

A jury of nine will decide whether the Tesla CEO artificially inflated the company's share price by touting the buyout's prospects and if so by how much.

Musk has also been sued by the US Securities and Exchange Commission over the tweets, leading to a combined $US40 million ($A57 million) in settlements for him and Tesla and a requirement that a Tesla lawyer screen some of his tweets in advance.