In keeping with his unorthodox style, Musk made the out-of-the blue announcement in a terse tweet.
On Twitter Tuesday, Musk said he has secured funding from a private buyer.
"Yes, might take Tesla private", he said. "Funding secured." It isn't clear what prompted the tweet. The stock had been up earlier in the day after The Financial Times reported a Saudi Arabian sovereign wealth fund had bought a $2 billion stake in Tesla.
Tesla went public in 2010, when it offered more than 13 million shares at $17 each.
Tesla did not immediate respond to requests for comment.
Typically, buyouts like this involve a new investor buying out smaller shareholders, since there are regulatory barriers to a privately held company having many small shareholders.
A deal at $420 per share represents a 22.8% premium to Tesla's closing price on Monday, valuing the company at about $72bn.
It's also unclear what brought him to the $420-a-share figure - the number can be used as a slang term for marijuana.
Musk has been under intense pressure this year to prove he can deliver on his promise to turn his money-losing company into a profitable higher-volume manufacturer, a goal that has propped up Tesla shares and resulted in a market value higher than that of General Motors Co.
Tesla (TSLA) has burned through cash while struggling to produce its Model 3 cars. The company is now valued at just over $60 billion, with Musk holding an nearly 20 percent stake in the company.