As one of many main innovators in electrical autos, carmaker Tesla has generated lots of press. It’s developed a loyal following from clients who imagine within the firm’s know-how and sometimes laud CEO Elon Musk with devotion. It’s one of many highest-profile Silicon Valley tech firms, and buyers have loved the inventory’s fast run-up over the past decade, and it’s landed a spot within the Magnificent 7 shares.
However in the present day’s Tesla buyers want to grasp how the corporate will probably be impacted by growing competitors in electrical autos from legacy carmakers akin to Ford (F) and Normal Motors (GM). Additionally key are the impacts on Tesla’s lofty valuation resulting from excessive rates of interest, declining gross sales and Elon Musk’s involvement within the Trump administration. Nonetheless, Tesla inventory has seen an enormous run over the past decade, making Tesla inventory among the finest investments within the interval.
Right here’s what else you need to learn about investing in Tesla (TSLA) and the right way to purchase shares within the electrical automobile big.
Investing in Tesla by the numbers
- Tesla is the ninth most dear firm within the S&P 500 as of April 2025 with a complete market capitalization of about $919 billion.
- Tesla bought greater than 1.79 million autos in 2024, whereas it delivered greater than 1.81 million in 2023, exhibiting a slight dip 12 months over 12 months.
- Tesla declared a three-for-one inventory cut up in August 2022 with shareholders of file receiving two extra shares for every share they held. That adopted a five-for-one cut up in August 2020.
- Tesla CEO Elon Musk is the corporate’s largest shareholder and the richest individual on the planet, with a web value of about $335 billion as of April 2025, in response to Bloomberg.
- Tesla generated $97.7 billion in gross sales in 2024, up barely from $96.8 billion in 2023. These figures are up considerably from Tesla’s $53.8 billion in income in 2021.
- Musk acquired social media firm Twitter in a $44 billion deal in 2022.
Tesla’s current developments
Tesla inventory splits
In August 2022, Tesla introduced that its board of administrators had authorised and declared a three-for-one cut up of Tesla’s inventory. Anybody who was a shareholder on Aug. 17, 2022 acquired a inventory dividend of two extra shares of Tesla inventory for every share they held on the time. For instance, for those who held 100 shares of Tesla inventory, you acquired an extra 200 shares that had been distributed to your account after the market closed on Aug. 24.
The worth of Tesla shares then started buying and selling on a split-adjusted foundation the next day, August 25. A inventory cut up has no impression on the general worth of the corporate or the worth of your complete funding. The share worth is adjusted right down to replicate the elevated variety of shares that at the moment are excellent.
Tesla carried out a five-for-one inventory cut up in August 2020, successfully quintupling the variety of excellent shares of its inventory.
The right way to purchase Tesla inventory
1. Analyze Tesla and its financials
Analyzing an organization’s aggressive place and financials might be the only hardest a part of shopping for the inventory, nevertheless it’s additionally an important. The perfect place to start is with the corporate’s Type 10-Ok, which is the annual report that every one publicly traded firms should file with the SEC.
The ten-Ok might help you perceive quite a bit concerning the firm:
- the way it makes cash and the way a lot
- its property and liabilities
- its profitability pattern over time
- the aggressive panorama
- the assorted dangers confronted by the enterprise
- the administration crew and the way they’re incentivized
The annual report is a good first step at discovering out concerning the firm, however you’ll wish to do greater than this. You’ll wish to research what different firms are doing to compete. It’s necessary to have a broader perspective on the business.
For instance, whereas Tesla is well-known for its electrical autos and efforts in autonomous driving, it’s not the one firm trying to get a bit of the rising market. Rivian Automotive, Lucid Motors and China’s NIO and BYD are all hoping to rival Tesla within the EV market and Alphabet’s Waymo division is working to develop autonomous autos.
Conventional automakers together with Normal Motors and Ford are additionally refocusing their companies towards hybrid-electric and all-electric autos. There are lots of gamers due to the huge alternative, however how the market will look in 5 to 10 years will be troublesome to foretell.
2. Does Tesla make sense in your portfolio?
With the comparatively small present marketplace for electrical vehicles rising quickly, Tesla might have a a lot bigger alternative tomorrow than it does in the present day. Whereas gross sales have been rising briskly over the previous couple of years, the corporate constantly operated at a loss from 2016-2019, and the corporate did see quarterly gross sales shrink in early 2025 after lackluster progress in 2024.
So that you’ll wish to contemplate the next questions:
- Do you perceive the enterprise and its future prospects?
- Will you be capable of proceed analyzing the enterprise and business because it grows?
- Given the inventory’s volatility, will you be capable of maintain on if it drops and even purchase extra?
- Do you may have a way of what the corporate is value and the way that compares to the present market worth?
- Tesla doesn’t pay a dividend – do you want that in a inventory?
3. How a lot are you able to afford to take a position?
Figuring out the quantity you may afford to take a position has much less to do with Tesla than with your individual private monetary state of affairs. Shares will be risky — Tesla particularly. So to present your funding time to work out, you’ll probably need to have the ability to depart the cash within the inventory for not less than three to 5 years. Which means you need to be capable of dwell with out the cash for not less than that size of time.
Committing to holding the inventory for 3 to 5 years is necessary. You’d hate to need to promote Tesla when it’s close to a low solely to observe it rebound a lot larger after you exited the place. By sticking to a long-term plan, you’ll be capable of trip out the ups and downs of the inventory.
When you’re investing in particular person shares, you’ll probably wish to preserve the share of any single place between three and 5 %. This fashion you’re not closely uncovered to 1 funding breaking your portfolio. If the inventory has extra enterprise danger, you then would possibly select a fair decrease share than this vary.
As well as, relatively than simply committing a one-time sum of cash to the inventory, contemplate how one can add cash to your place over time.
4. Open a brokerage account
Whereas opening a brokerage account might sound like a troublesome step, it’s really fairly simple, and you may have the whole lot arrange in quarter-hour or so.
You’ll wish to choose a dealer that caters to your wants. Are you buying and selling usually or sometimes? Do you want a excessive degree of service or analysis? Is price an important issue for you? When you’re shopping for just a few shares however investing primarily in funds, then quite a lot of brokers focus on providing commission-free buying and selling for these funds.
Right here is Bankrate’s checklist of greatest brokers for freshmen.
After you’ve opened your account, you’ll wish to fund it with sufficient cash to purchase Tesla inventory. However you may care for this step utterly on-line, and it’s easy.
With Tesla’s inventory worth within the lots of, you might not find the money for to purchase a whole share. A number of brokers, together with Charles Schwab and Constancy, have began providing fractional shares to assist with this drawback, permitting you to take a position with only a few {dollars}.
5. Purchase Tesla inventory
When you’ve determined to purchase Tesla inventory and also you’ve opened and funded your brokerage account, you may arrange your order. Use the corporate’s ticker image — TSLA — whenever you enter your order.
Most brokers have a “commerce ticket” on the backside of every web page, so you may enter your order. On the dealer’s order kind, you’ll enter the image and what number of shares you may afford, or the quantity you’d like to take a position for those who’re shopping for fractional shares. You then’ll enter the order kind: market or restrict. A market order will purchase the inventory at regardless of the present worth is, whereas the restrict order will execute provided that the inventory reaches the value that you just specify.
When you’re shopping for only a few shares, you then’re probably greatest off sticking with a market order. Even for those who pay a little bit bit extra now for a market order, it gained’t have an effect on the long-term efficiency a lot, if the inventory continues to carry out effectively.
Backside line
Shopping for a inventory will be thrilling, however success gained’t occur in a single day. Buyers ought to take a long-term perspective on their investments, and they need to contemplate profiting from dollar-cost averaging, in the event that they imagine within the inventory for the lengthy haul.
With dollar-cost averaging, buyers add a set amount of cash to their place over time, and that basically helps when a inventory declines, permitting them to buy extra shares. Excessive-flying shares can dip from time-to-time, so the technique might help you obtain a decrease purchase worth and better general income.
