How to Buy Tesla Stock (TSLA): Step-by-Step Guide and What to Consider
Buying Tesla stock is straightforward in practice: you’ll need an investment account with access to US markets, funds to cover at least a fractional share and a basic understanding of how to place an order.
However, understanding the company behind the shares and evaluating whether Tesla is a good investment can be more complicated. Below, we walk you through how to buy Tesla stock and examine some key things worth knowing before you do.
The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.
Table of Contents
How to Buy Tesla Stock: Step by Step
Tesla (TSLA) is listed on the Nasdaq and, therefore, can only be purchased through brokers which offer access to US markets. The process typically involves these five steps:
- Open an investment account. You need to choose a broker which provides access to the US stock market.
- Verify your identity. Brokers will require ID verification as part of the onboarding process before you can open your account and start investing.
- Deposit funds. If you deposit in a currency other than US dollars, a foreign exchange conversion may apply when purchasing US-listed shares.
- Search for Tesla. Once your account is open and funded, search for Tesla in your broker’s investment platform.
- Place your order. Create a new order and enter the number of shares you want to buy. You can choose either a market order, which executes immediately at the next available price, or a limit order, which only executes if the price reaches a level you specify.
It's worth noting that fractional shares are available for Tesla through many platforms. This means you don't need to purchase a whole share; you can invest a fixed amount and receive a fraction of a share.
Tesla at a Glance
Tesla, Inc. was founded in 2003 and is most well known for popularising electric vehicles. However, the company has evolved beyond just manufacturing cars.
Tesla’s business spans several distinct areas, including:
- Automotive: Electric vehicles, including the Model 3, Model Y and Cybertruck.
- Energy Generation and Storage: Solar panels and battery systems for homes and businesses.
- Services: FSD (Full Self-Drive) subscriptions, the Supercharger network, insurance and vehicle servicing
- Robotaxi: Unsupervised rides launched in Austin in early 2026 and have since expanded to Dallas and Houston.
- Robotics: Tesla is restructuring its Fremont factory into a production line for its Optimus humanoid robot.
Tesla Financial Results
Last year was a difficult one for Tesla by many financial measures; it saw the company’s first ever annual revenue decline, with profitability dropping significantly as well.
Source: Tesla Q4 & FY2025 Update
For the second year running, vehicle deliveries and automotive revenue both dropped, and competitor BYD overtook Tesla as the world’s largest seller of electric vehicles, selling 2.25 million battery powered cars.
Whilst total revenue dipped just 3%, operating income sank 38% as rising operating expenses were “driven by AI and other R&D projects”. Subsequently, net income plummeted 46% year on year. Nevertheless, revenue from its energy generation and storage segment grew by 27%, with services and other revenue also climbing 19%.
Is Tesla a Good Stock to Buy?
Tesla is a company which divides opinion, to say the least. The stock currently trades at a valuation which is difficult to justify based on current earnings, meaning that the investment case rests on what Tesla will become over the next decade or so.
The Bull Case for Tesla
The core of the bull argument is that Tesla has evolved beyond being a car company, with several sources of potential long-term value:
- A commercial robotaxi service already operating in multiple US cities, with the purpose-built Cybercab entering production.
- An energy generation and storage business showing strong year on year growth, with higher margins than its core automotive division.
- FSD subscriptions growing strongly, with around 1.3 million subscribers currently.
- Having freed up factory space to produce its Optimus robot, Tesla intends to start selling them to the public by the end of 2027. CEO Elon Musk has previously said that Optimus will be its most important product.
- A net cash position of around $35 billion, providing the company with considerable financial flexibility.
Essentially, the bull case is that if these different businesses succeed at scale, it could end up justifying Tesla’s high valuation, and then some.
The Bear Case for Tesla
Investors who are bearish about Tesla don’t necessarily think the company will fail, only that it may end up falling short of the extraordinary expectations priced into its shares. Critics point to several genuine concerns:
- Tesla recorded its first annual revenue decline in 2025, with vehicle deliveries falling 9% and BYD overtaking it as the world's largest EV manufacturer. Although Tesla now has multiple revenue streams, vehicles remain its bread and butter.
- The stock trades at a trailing price-to-earnings ratio of more than 300. For reference, the wider S&P 500 was trading at around 27 times earnings as of 8 May 2026. Such a high valuation leaves practically no margin for error.
- The robotaxi rollout remains small in scale; regulatory approval for unsupervised driving varies significantly by market and could slow expansion considerably.
- Elon Musk's attention is divided across a number of companies, including Tesla, SpaceX, xAI and Neuralink. This is a concern that surfaces regularly in analyst commentary and is compounded by the regular controversy surrounding him.
- Tesla has raised its capital expenditure forecast for 2026 to $25 billion, up from $8.5 billion the previous year. The increase is expected to lead to negative free cash flow in 2026.
What to Consider Before You Invest in Tesla
Tesla is not a straightforward stock to evaluate and there are several factors to consider before investing.
Much of the investment case depends on businesses - such as robotics, robotaxi and energy generation and storage - that are either very early-stage or still only generate a fraction of Tesla’s total revenue. It could potentially take a long time for this investment thesis to pan out, if it does at all.
As well as a degree of patience, investors should also be comfortable holding a stock which has historically been rather volatile. The Tesla share price can move dramatically in the short term on news and sentiment, and those swings can be severe in both directions.
Lastly, trading at more than 300 times trailing earnings, Tesla is priced for enormous success. By investing at that valuation, investors are essentially expressing confidence that its non-automotive businesses will scale significantly in the years ahead.
For investors who do not share that level of confidence, the risk to reward at the current valuation may not be attractive, regardless of how they feel about the company itself.
Conclusion
Buying Tesla stock is a relatively straightforward process; you need to open an investment account with access to the US markets, search for TSLA, and place your order. However, whether or not to buy Tesla shares in the first place is a more complex question.
The investment case largely hinges on whether Tesla's non-automotive businesses can scale quickly enough to justify a valuation that already prices in a great deal of future success. There are merits to both the bull and bear cases, but with a trailing P/E of more than 300, there is little room for error.
For investors who want diversified exposure to Tesla, there are a number of Exchange-Traded Funds (ETFs) which hold the company as a component. For example, any ETF which tracks the S&P 500 will hold Tesla, as does the ARK Innovation ETF, which is an actively managed ETF that counts Tesla as its largest single holding.
As with any investment, the decision comes down to individual circumstances - in particular time horizon and attitude to risk.
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Frequently Asked Questions
Is Tesla stock overvalued?
It depends on how much value investors assign to Tesla's different businesses, such as robotaxis, energy and robotics. Tesla looks expensive on paper because it has a trailing P/E of more than 300, well above the wider market. Bears might argue the current price is impossible to justify on fundamentals, whereas bulls may insist that the potential for Tesla's non-automotive businesses justifies its premium.
Has Tesla done a stock split?
Yes, twice. Tesla carried out a 5-for-1 stock split in August 2020 and a 3-for-1 split in August 2022. A stock split increases the number of shares in circulation whilst reducing the price per share proportionally; it does not affect the company's total market value or the value of an investor's existing holding.
Does Tesla pay a dividend?
No. Tesla does not currently pay a dividend and has not announced any plans to do so in the future.
How do I short Tesla stock?
Traders can short Tesla using derivative products such as Contracts for Difference (CFDs), which allow traders to speculate on both rising and falling prices without owning the underlying shares. However, trading CFDs has higher associated risks due to leverage and may not be suitable for everyone.
Can I buy fractional Tesla shares?
Yes, many brokers allow investors to buy fractional shares in Tesla. This means you can invest a fixed cash amount rather than buying a whole Tesla share, though it might be worth confirming availability before opening an account.
What ETFs include Tesla?
As a component of several major stock indices, including the S&P 500, there are many tracker ETFs which count Tesla among their holdings, such as the iShares S&P 500 UCITS ETF. The actively managed ARK Innovation ETF also holds Tesla as its largest single component.
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