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Headed up by controversial billionaire Elon Musk, Tesla (TSLA) is the world’s most highly valued car manufacturer and one of the more popular stocks on the US Nasdaq.
Tesla accounted for three quarters of the electric cars sold in the US in 2022, and around 20% of EVs sold across the globe in the latest figures to July of 2023. There is considerable interest locally, too, in electric vehicles such as Tesla, with sales of new electric cars in Australia tripling in the 12 months to January 2022—no doubt fuelled by increasingly high petrol costs. As of December last year, there were 80,446 electric vehicles sold in Australia to date, and some 43,924—or 54.6%—were Teslas. According to Go Auto site, the brand’s overall share of the Australian market stands at 3.9%, which may not seem like much, but is just ahead of Subaru, which has 3.8% market share.
The company’s performance over time is the envy of many. However, Tesla is not immune to the global supply chain issues that have plagued other industries—nor to disruptions related to its controversial CEO. Musk spent much of the first month of 2023 embroiled in a court case surrounding two (you guessed it) tweets in August in 2018, in which Musk boasted that he had financing lined up to take Tesla private.
Stock was down at the time and Musk’s tweets—which, had they been accurate, would have spelt a $US72 billion buyout at $US420 per share—sent the share price soaring. Once it became clear the deal was nowhere to be seen, the rally reversed and stocks slumped, prompting shareholders to sue Musk for the tweets that provoked such volatility.
Nevertheless, these drops are off extraordinary highs, and, overall, Tesla figures remain relatively healthy considering the macro economic environment. In its most recent earnings report, the electric vehicle manufacturer brought in $25.1 billion in revenue for the last quarter of 2023, which was short of analysts’ expectations of $25.76 billion in revenue. Wall Street was hoping for 73 cents a share, and instead Tesla delivered 71 cents. However, revenue increased 3% year-over-year from $24.3 billion in 2022.
On the investor call, Musk said the company was in between two major growth waves, and that vehicle volume growth in 2024 “may be notably lower” than last year’s growth rate as the company focuses on launching a new model.
In its previous earnings report for Q3, released in late October, the company made a profit of $US1.85 billion, but this was down from $3.29 billion, or 95 cents a share, a year earlier. Revenue came in at $US23.35 billion—a 9% increase year-on-year.
“Tesla is an incredibly capable ship,” Musk reportedly said on the call. “Even a great ship in a storm has challenges.” He also made further allusions to war being bad for business, referring to Middle East conflict and Russia’s invasion of Ukraine.
As of March 2024, Tesla has a market cap of $US559 billion and shares were trading at $US178.65. Here’s what you need to know about buying—and selling—Tesla shares.
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How to Invest in Tesla Via a Fund
Investing direct in individual stocks can be a fun, fascinating and, hopefully, profitable experience. It may also qualify you for shareholder perks specific to the company in question.
Investing direct in individual companies can, however, leave you vulnerable to stock market volatility and unforeseen swings in share prices. Nowadays, even a solo tweet – let alone a full-blown geo-political conflict – can send shock waves through the stock market.
That’s why, financial experts recommend that most people invest in a diversified mix of asset classes and funds that hold hundreds, if not thousands, of company shares.
Being a major component of the Nasdaq index, Tesla is found in many ‘active’ and ‘passive’ (index tracker) funds incorporating a bias towards the US.
Note: investing in companies comes with no guarantees. When buying company shares, it’s possible to lose some, and very occasionally all, of your money. Past performance is no prediction of future performance and this article is not intended as a recommendation of any kind.
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Frequently Asked Questions (FAQs)
How can I buy Tesla stocks online?
If you’re based in Australia, it’s relatively easy to buy Telstra shares online you just need to make sure the online brokerage platform you choose has access to the Nasdaq, which is where Tesla shares are listed. With US shares you can also opt for fractional trading. Just make sure you do your research on the best share trading platform for your needs.
Can I buy Tesla shares on CommSec?
Yes, you can. First, you need to open an international trading account and then you will have access to the Nasdaq, which lists Tesla. For the un-initiated, CommSec is the stock broking platform of Commonwealth Bank.
Does Tesla pay dividends?
As a general rule, Tesla does not make regular cash dividend payments to shareholders. However, it appears to make an exception for stock splits. It carried out a dividend pay-out in 2020 during a five-for-one stock split. And in August 2022 it secured a three-for-one stock split, which allowed the company to pay dividends of two shares for each share.
Does Tesla stock have a future?
There is no certainty with any stock, and 2023 was certainly a volatile space for equities. However, Tesla has performed well in a constrained economic environment, posting a $US81.5 billion worth of revenue in 2022, while net profit more than doubled to $US12.6 billion. In 2023, it produced a mixed bag of results: strong revenue, but some constraints around operating margins and a failure to meet analysts’ expectations. Read the Q4 Earnings Report for 2023 and undertake your own research to determine whether you should buy Tesla stock.
Does Tesla make a profit?
Yes, Tesla is a profitable company. The EV maker first turned a profit in 2020, and went on to record of $US12.55 billion in net profits for 2022. This came after 17 years of failing to turn a profit, which Musk attributed to supply chain issues and high production costs.
