Second, my intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX. If we were to go private, employees would still be able to periodically sell their shares and exercise their options. This would enable you to still share in the growing value of the company that you have all worked so hard to build over time. How does this work as a private company?
Private companies are still allowed to give share to employees. Employees are then allowed to sell their stock periodically (every 6 months in this case).
The main difference though is sell to whom? In the case of a public company, you sell your shares via the market to whomever will buy them. In the case of a private company, you're selling the shares back to the company, and the valuation is formulaic instead of market-based (unless there is some kind of private "market" that continues, but I've never seen that and would doubt its legality).