Should I Invest in Tesla Shares?

Electric Vehicle (EV) ownership is on the rise and, due to the need to reduce our emissions, it is probably a fairly safe assumption that demand for EVs will continue to rise in the future. Although competition has increased significantly in the EV sector, there is still one undisputed king: Tesla.

In the last few years, investors have swarmed to buy Tesla shares, turning it into the most valuable car manufacturer in the world. But is it too late to invest in Tesla? In this article, we will look at the question, ‘should I invest in Tesla?’, look at the evolution of Tesla’s share price, demonstrate how to buy Tesla shares and much more!

Tesla Inc. - A Brief History

In less than twenty years, Tesla has gone from being founded to becoming the largest car manufacturer in the world by market capitalisation.

How did it get there? Before we look at investing in Tesla and how to buy Tesla shares, let’s take a quick look at some of the highlights of Tesla’s short, and incredibly successful, history.

• 2003: Tesla founded by Mark Tarpening and Martin Eberhard
• 2004: Elon Musk contributes $6.5 million out of a total of $7.5 million to Tesla’s series A funding and subsequently joins the company as chairman of the board of directors.
• 2008: Tesla begins deliveries of its first car, the Roadster, delivering 147 vehicles by the end of the year. Musk becomes CEO.
• 2010: Tesla launches an Initial Public Offering (IPO) on the NASDAQ, issuing 13.3 million shares at a price of $17 per share
• 2012: Tesla launches its second car, the Model S luxury sedan
• 2020: In December, following four consecutive profitable quarters, Tesla is included in the S&P 500 for the first time
• 2022: Tesla delivers record 1.31 million vehicles

The year 2020 marked the first year which Tesla recorded a full-year profit and, since then, the EV manufacturer has performed strongly.

It is important to remember that, if you buy Tesla shares, you are buying a portion of the company. Consequently, the success of your investment is dependent on the future success of Tesla. Therefore, before you invest in Tesla, you should be sure to familiarise yourself with their recent financial performance.

In the table below, we have summarised a few of the key figures from Tesla’s annual results.

Source: Tesla – Q4 and Full-Year 2022 Update

When considering whether or not to buy Tesla shares, one of the important metrics to consider is vehicle deliveries, which measures the amount of vehicles sold and delivered to customers over the time period.

A number of new factories have allowed Tesla to really ramp up production in recent years, with vehicle deliveries increasing 435% in the five years between 2018 and 2022.

Tesla Share Price Analysis

Since Tesla went public in 2010, its performance on the stock market has been nothing short of remarkable. Before we address the question of ‘should I invest in Tesla?’ – let’s take a look at the evolution of the Tesla share price in recent years.

It’s hard to tell from the chart above, but from the start of 2017 to the end of 2019, Tesla shares gained an impressive 96%; however, it was 2020 when Tesla stock exploded.

A setback caused by the outbreak of Covid-19 at the beginning of the year was quickly overcome and Tesla shares closed the year with a gain of more than 740%. Along the way, Tesla dethroned Toyota as the most valuable car company in the world, gained admission into the S&P 500 and recorded its first profitable year!

The year 2021 saw Tesla stock growth slow as pandemic-era supply chain disruptions wrought havoc around the globe. However, despite the “slow down”, Tesla shares closed the year with a gain of 50% and a market capitalisation of more than $1 trillion, putting the EV manufacturer in a very exclusive and select group of companies which have achieved this impressive benchmark.

The year 2022 was less kind to Tesla shares, with share price plummeting 65%. This was largely due to the general stock market malaise caused by high inflation, rising interest rates and general economic uncertainty.

However, it was also in part a consequence of CEO Elon Musk’s acquisition of Twitter, of which he subsequently also became CEO. With Musk’s plate already fairly full before the acquisition, many believed the Tesla CEO may have spread himself too thin, which spooked some investors. Nevertheless, Musk has since announced the appointment of a new Twitter CEO to relieve him of his duties.

But is this latest downturn in Tesla share price a momentary blip on the way to further runaway success? Could now be an opportunity to buy Tesla shares? Or is it too late to invest in Tesla?

Trade Tesla Stock CFDs with Admirals

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With a Trade.MT5 account from Admirals, you can trade Contracts For Difference (CFDs) on Tesla stock and over 3,300 other shares around the world! CFDs allow traders to attempt to profit from both rising and falling prices by going long and short. Furthermore, CFDs also benefit from the use of leverage! Click the banner below to open an account today:

Should I Invest in Tesla Stock?

We have seen that Tesla shares have been very successful over the past five years. But history is history, what about the future?

As we said at the beginning of the article, demand for electric vehicles is rising. According to the International Energy Agency (IEA), electric cars made up 14% of the overall car market, up from 4% in 2020.

With many countries around the world planning to ban the sale of petrol powered vehicles in the future, this percentage is likely to increase over the coming years, as EVs become the future of the car industry.

Tesla saw this future earlier than most and wasted no time in positioning itself to take full advantage of this growing market. Although there are many new competitors entering the industry, Tesla has cemented its position as a market leader. Furthermore, whilst many EV producers struggle to deliver a significant number of vehicles, Tesla continues ramping up production and turning a sizeable profit whilst doing it.

However, if you are reading this and considering investing in Tesla shares, it is important to bear in mind that a lot of this information and potential success will already be accounted for in the current Tesla share price. The stock market clearly expects Tesla’s success to continue, which is why the company is valued so highly.

Nevertheless, as mentioned earlier, Tesla’s share price fell a lot last year. This fall in share price could represent an interesting buying opportunity for Tesla stock for those who feel confident about the company’s future success.

But the question ‘should I invest in Tesla stock?’ is really one you need to answer yourself. Investing in Tesla should be a decision you arrive at from your own research. For those who are considering buying Tesla shares, as with any other investment at the moment, you should be prepared for short-term volatility as the stock markets continue to react to economic uncertainty.

How to Buy Tesla Shares

With an Invest.MT5 account from Admirals, you can invest in Tesla shares and more than 4,300 other listed companies from around the world! In order to find out how to buy Tesla shares, read the following steps:

• Open an Invest.MT5 account and log in to the Dashboard
• Next to your account details, click ‘Invest’ to open the MetaTrader Web Terminal
• Search for the Tesla stock symbol and open the price chart
• Click 'Create New Order' at the bottom of the screen, enter the number of Tesla shares you wish to purchase and click ‘Buy’ to send your order to the market!

Invest in Tesla with Admirals

With an investing account from Admirals, you can buy shares in Tesla and over 4,500 other listed companies from around the world. Click the banner below to register for your account today:

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The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:

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• The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
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