• Baillie Gifford held a 7.67% stake in February and 6.32% in June
  • The Scottish fund manager’s current stake is worth about $18.8 billion
  • Year-to-date through Tuesday, Tesla shares have skyrocketed more than 460%.

Shares of Tesla (TSLA) dropped on Wednesday after the electric vehicle maker’s largest outside shareholder cut its stake in the company.

Scotland-based investment house Baillie Gifford and Co. said in a filing with the Securities and Exchange Commission that it reduced its ownership interest in Tesla.

Baillie Gifford held a 4.25% stake in Tesla at the end of August, down from 7.67% in February and 6.32% in June. The Scottish fund manager’s current stake is worth about $18.8 billion.

Baillie Gifford was Tesla’s second-largest shareholder after CEO Elon Musk himself.

The reduction was done to abide by the fund manager’s portfolio restriction rules that forbid too much exposure to any one stock.

As of 2:35 p.m. EDT, Tesla shares were down 6.44%. Earlier in the day, Tesla shares were down nearly 15%.

“We intend to remain significant shareholders [of Tesla] for many years ahead. We remain very optimistic about the future of the company,” said Baillie Gifford’s manager James Anderson. “The substantial increase in Tesla’s share price means that we needed to reduce our holding in order to reflect concentration guidelines which restrict the weight of a single stock in clients’ portfolios.”

Year-to-date through Tuesday, Tesla shares have surged more than 460%. The company now has a market cap of $413 billion, making it the most valuable automaker in the world. Tesla has also delivered four consecutive quarters of profits, raising speculation it will be added to the S&P 500 index.

Anderson added: “Tesla no longer faces any difficulty in raising capital at scale from outside sources but should there be serious setbacks in the share price we would welcome the opportunity to once again increase our shareholding.”

Tesla, which recently effected a five-for-one stock split, said it plans to raise capital by offering some $5 billion in shares.

Separately, on a visit to Germany, Musk was welcomed by that country’s economy minister.

Peter Altmaier, the federal minister for economic affairs and energy, told Musk that Tesla will have “every assistance” it needs for its new Gigafactory in Berlin.

The under-construction factory in Berlin will become Tesla’s first European car plant, employ about 12,000 people, and manufacture up 500,000 cars a year.

The factory is scheduled to commence production in the summer of 2021.