Investing in Tesla Stock: Everything You Need to Know

Tesla, Inc. (NASDAQ: TSLA) is arguably one of the best EV stocks to own and has been at the forefront of the electric vehicle (EV) revolution for over a decade. That’s why Tesla stock has garnered significant attention from investors worldwide.

If you’re considering investing in Tesla stock or already have a stake in the company, this article will provide you with a comprehensive overview of what you need to know.

Understanding Tesla’s Journey

Tesla, founded by Elon Musk in 2003, has emerged as a leader in the EV industry. The company’s mission is to accelerate the world’s transition to sustainable energy. Tesla has not only disrupted the automotive sector but has also expanded into energy storage, solar power, and autonomous driving technology.

Key Statistics

Before diving into investing in Tesla stock, let’s look at some essential statistics (as of September 2023):

  • Stock Ticker: TSLA
  • Market Capitalization: ~ $800 billion
  • Total Return since IPO: 19,314%
  • Total Vehicles Delivered YTD (As of Q2 2023): 466,100
  • P/E Ratio: ~ 70
  • P/S Ratio: ~ 9
  • 52-Week High/Low: High – $313, Low – $101
  • Revenue (2022): Approximately $81.46 billion
  • Net Income (2022): Approximately $12.58 million
  • Operating Margin (Q2 2023): 10%
  • Total Cash on Hand: $23 billion

These statistics provide a snapshot of Tesla’s financial health and market position, but it’s essential to remember that the stock market is highly dynamic, and these numbers can change rapidly.

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Factors Affecting Tesla’s Stock Price

Investing in Tesla stock involves understanding the various factors that can influence its price. Here are some key considerations:

  1. Electric Vehicle Market Growth: Tesla’s success is closely tied to the growth of the EV market. As governments worldwide push for cleaner transportation, Tesla stands to benefit.
  2. Battery Technology Advancements: Tesla’s ability to develop more efficient and cost-effective battery technology can significantly impact its competitive edge.
  3. Regulatory Environment: Government policies and regulations on emissions, subsidies, and incentives can impact Tesla’s sales and profitability.
  4. Competition: Traditional automakers and new entrants are increasingly entering the EV market, posing both challenges and opportunities for Tesla.
  5. Elon Musk’s Influence: Tesla’s stock price can be influenced by Elon Musk’s posts and public statements, making it a unique factor to consider.

Risks Associated with Tesla Stock

While Tesla presents exciting growth potential, it’s essential to be aware of the risks:

  • Volatility: Tesla’s stock is known for its extreme price swings, which can be nerve-wracking for investors.
  • Competition: As the EV market becomes more crowded, Tesla faces growing competition that could affect its market share and profitability.
  • Production Challenges: Meeting demand for Tesla vehicles at scale has historically been a challenge for the company.

Competitors

Here is a list of some of Tesla’s publicly traded competitors as of that time:

  • BYD Company Limited (BYDDF): A Chinese multinational company specializing in electric vehicles, batteries, and renewable energy solutions. BYD is known for its electric cars, buses, and monorails and is a significant player in the global EV market.
  • NIO Inc. (NIO): A Chinese electric vehicle manufacturer known for its premium electric SUVs and innovative battery-swapping technology.
  • General Motors Company (GM): A traditional automaker that has been aggressively investing in electric vehicles, including the Chevrolet Bolt and plans for an all-electric future.
  • Ford Motor Company (F): Ford has been increasing its focus on EVs with models like the Mustang Mach-E and the upcoming all-electric Ford F-150 Lightning.
  • Volkswagen Group (VWAGY): Volkswagen, one of the world’s largest automakers, has been ramping up its electric vehicle production under various brand names, including Volkswagen, Audi, and Porsche.
  • BMW AG (BMWYY): BMW has expanded its electric vehicle offerings, with models like the BMW i3 and iX3 and plans for more electric models in the future.
  • Rivian Automotive, Inc. (RIVN): A U.S.-based electric vehicle startup focusing on electric trucks and SUVs, including the R1T pickup truck and R1S SUV.
  • Lucid Motors, Inc. (LCID): Another U.S.-based electric vehicle manufacturer, known for its luxury electric sedan, the Lucid Air.
  • XPeng Inc. (XPEV): A Chinese electric vehicle company that produces smart EVs, including the G3 SUV and P7 sedan.
  • Li Auto Inc. (LI): A Chinese electric vehicle manufacturer specializing in extended-range electric SUVs with a gasoline generator as a backup.
  • Hyundai Motor Company (HYMTF): Hyundai has been expanding its electric vehicle lineup with models like the Hyundai Kona Electric and Ioniq series.

How to Invest in Tesla Stock

If you’re ready to invest in Tesla, here are the general steps:

  1. Open a brokerage account: Choose a reputable online brokerage platform to buy and sell TSLA shares.
  2. Fund your account: Deposit the amount you wish to invest.
  3. Place your order: Use your brokerage account to purchase Tesla shares. You can choose market orders, limit orders, or other order types based on your investment strategy.
  4. Monitor and manage: Keep an eye on your investment and consider setting stop-loss orders to limit potential losses.

Frequently Asked Questions

Tesla has fewer outstanding shares than Apple does and the company trades at a higher P/E ratio due to its expected growth in the future. That’s basically why Tesla stock trades at a much higher price.

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Tesla CEO Elon Musk believes that Tesla could be worth more than Apple and Saudi Aramco combined if the company executes.

If Musk is right then TSLA shares may trade far higher than Apple stock over the next few years.

Companies with fewer shares outstanding tend to have higher stock prices on average. Let’s take a look at the shares outstanding of Tesla vs Apple. You will notice that Apple’s total share outstanding count outnumbers Tesla’s by 5 to 1.

  • Tesla Shares Outstanding: 3.1 billion
  • Apple Shares Outstanding: 16.07 billion

When a company issues a large number of shares, the company’s stock price usually costs much less due to a higher supply. Apple’s total shar

Resources

For further research and guidance on investing in Tesla stock, consider these resources:

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  • Tesla Investor Relations: Tesla Investor Relations
  • Tesla Blogs: Teslarati
  • Financial News: Keep up with the latest financial news related to Tesla on platforms like CNBC, Bloomberg, or Reuters.
  • Analyst Reports: Read research reports from financial analysts to gain insights into Tesla’s performance and future prospects.
  • Investment Forums: Engage with the Tesla investment community on platforms like Reddit’s r/teslainvestorsclub or Seeking Alpha for diverse perspectives.

Remember that investing in stocks, including Tesla, carries risks, and it’s essential to do thorough research and consider your financial goals before making any investment decisions.

Consulting with a financial advisor can also be valuable, especially if you are new to investing or have significant assets at stake. Always stay informed and make well-informed decisions based on your individual financial situation and risk tolerance.

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