It’s time to utilize the search bar to acquire Tesla shares once you’ve funded your account. Click the ‘TRADE’ button after typing Tesla or TSLA into the search box.
The order form will be shown. Now is the moment to place any bet that is greater than $50 US dollars.
If you trade within regular market hours, the ‘Open Trade’ option will appear. Otherwise, you can place your order by clicking the ‘Set Order’ button: your order will be executed once the market opens and the requirements are satisfied.
Once you know how to buy Tesla shares, it’s time to understand when and why you should or should not buy Tesla shares. Let’s start with a quick analysis of the company.
Even though many factors can affect shares, you can keep it simple and stick to the basics. These are the top three factors worth your attention when it comes to deciding on Tesla shares.
Analyze the news
News often affects not only the current value of shares but also their potential value. For example, in recent news, Tesla unveiled its new supercomputer, which is already the fifth most potent computer globally. It’s being used to train the neural networks that power Tesla’s autopilot and upcoming autonomous AI.
“Tesla is developing a NN training computer called Dojo to process truly vast amounts of video data. It’s a beast! Please consider joining our AI or computer/chip teams if this sounds interesting,”
Musk shared on his Twitter.
Tesla’s current version of the system is only a third of the final configuration of the ‘Dojo’ so that the company may end up with the second most powerful supercomputer in the world at its disposal. Tesla has been working on the ‘Dojo’ for the past few years, and Musk hints that it should be ready by the end of this year.
In other news, Tesla has announced that it has completed the first phase of equipping supercharging stations for electric cars on the Great Silk Road. The company has installed Supercharger stations along the stretch from Shanghai to Khorgos, located in the west and east of the country. The total length of the section is 5,000 km, where 27 charging stations have been installed. Thus, the owners of electric cars will find a place to recharge their vehicles every 100-300 km. Earlier, the company reported that it intends to lay a full-fledged route with superfast charging stations to London. At the moment, Tesla has built about 2.7 thousand Supercharger charging stations around the world.
How could this news affect the share price? Most likely, the company’s shares will rise in price after this news:
- Accurate algorithms and powerful computers will improve the autopilot, which could spur the company to develop passenger transportation. Then the company will become a direct competitor to Uber in the U.S, which opens up significant opportunities.
- Building charging stations in Asia strengthens the company’s position in China, one of the most developed markets for e-cars.
The earlier you react to the news, the more chances you have to make the right decision.
Consider different factors
Some news is not directly related to Tesla but can nevertheless change Tesla Shares price and valuation. For example, The Boring Company (Elon Musk) not long ago tested its LVCC Loop underground tunnels built under the Las Vegas Convention Center.
The tunnels are about 10 meters deep. Dozens of Tesla cars were used for the tests, including the Model 3, the Model Y, and Model X. The Boring Company claims that these tunnels turn a 45-minute walk into a two-minute ride.
One test ride set a speed record of 185 km/h. At the time of the official launch, the speed will be limited to 240 km/h. So what is interesting about this news in terms of Tesla shares? This news is not particularly useful per se, but some sources assure that the expanded version of the tunnel will fit two shipping containers without problems. Imagine if Tesla had trucks for transportation. The company is already planning to produce trucks. At least that’s the rumor; no one knows for sure. Anyway, the transport revolution is a matter of when not if… and guess which company is most likely going to take over?
The construction of tunnels and the development of autopilot technology create enormous potential for the company’s growth. Even if the company decides not to use tunnels for trucking (for example, if the government deems them unsafe and bans tunnels), Tesla could create a company to transport passengers. Short routes and the latest self-driving cars will leave no chance for traditional transportation such as Uber, Lyft, etc.
Listen to experienced investors.
Expert opinion can help you decide if you have little experience — for example, Michael Burry bets against Tesla.
The businessman is famous for being one of the first to predict the collapse of the real estate and mortgage market, which caused the financial crisis in 2008. Burry made a bet against the American real estate market, earning Scion Capital $ 700 million for investors. Later, his story was the basis for the movie “Down Game.”
Recently, Burry shed light on his bet against Tesla. The investor has previously pointed out that Tesla’s reliance on regulatory loans to generate profits is the company’s weakness. Regulatory credits the company gets from government programs to support renewable energy for producing environmentally friendly cars. Other automakers are forced to buy such credits to offset the carbon footprint of their products and avoid being sanctioned.
However, Michael Burry is also betting against Elon Musk’s company SpaceX: he took a long position in the shares of Vector Acquisition Corp, which presents Rocket Lab to the public and is a direct competitor of SpaceX. Such an approach can indicate an investor’s personal stance as well as a detailed analysis built on facts.
Whether or not to trust the experts is up to you. We advise you to study several sources and decide based on them instead of blindly trusting any single source.
It’s important to consider previous performance to make a reliable prediction on Tesla shares.
Tesla’s share price on June 23, 2021, is displayed below:
In financial analysis, there is the P/E ratio, the ratio of capitalization to net income. For example, today, Tesla is valued at 1,500 annual profits. In other words, at the current level of earnings, an investment in Tesla will pay off in 1,500 years.
However, the electric car market is constantly expanding, and with it, the company’s revenues are steadily growing. Consequently, the returns will increase, and the payback period will shorten.
Tesla has averaged 42% sales growth over the past three years. Of course, the bigger the company, the harder it is to maintain the growth rate, but the auto industry revolution is just beginning, according to many. So let’s assume that Tesla sales will only grow in the future (50% annually). So in 2030, Tesla’s revenue will exceed $1.5 trillion, three times more than Walmart, the largest company by revenue today.
“This price was reached amid much speculative frenzy and much-forced buying by index funds,” Munger said in his letter to Daily Journal shareholders.
Charles Munger — vice chairman of Berkshire Hathaway
Let’s imagine Tesla starts paying dividends in 2030, but how much? All companies have different dividend policies. For example, P&G has a payout ratio above 55%, and the P/E ratio already reaches 25. In our hyperoptimistic forecast, the Tesla board of directors is as generous as possible and will steadily allocate 80% of net profit to dividends, as the board does at Coca-Cola.
To estimate the payback, let’s figure out Tesla’s profitability. In 2020 the company reported its first annual net profit. This result was made possible solely by regulatory loans. If we look strictly at operations, the company is still unprofitable. But for now, we set aside these formalities and consider that Tesla is investing enormous amounts of money in expanding production.
If we look at margins among the major automakers, represented by Toyota, Volkswagen, Ford, and General Motors, we see that their profit margin is historically less than 10 percent. But Musk’s genius is infinite, so let’s imagine that in 2031 Tesla’s margin will reach 20%. Moreover, with a net income of $400+ billion, the company will spend more than $300 billion on dividends.
By determining the dividend yield, we can state that a share worth $850 in the above circumstances will pay off in 2 years from the start of the dividend payout. Thus, the total payback period would be 12 years. Thus, all Tesla needs is a 100-fold rise in sales to $3 trillion to become the world’s richest business and multiply the efficiency of the whole industry while its competitors sit idle.
Surprisingly, not everyone realizes that such a scenario is impossible or, to put it mildly, statistically unlikely. We’ve seen the dollar millionaires, representatives of the venture capital community, who justify the value of Tesla by comparing its revenue growth as a percentage of other automakers as if they don’t understand that +5% to 100 billion is more than +20% to 20. The following chart visualizes the absurdity of such thinking very well.
Comparison of capitalization and revenues of automakers
The market value of Tesla is much higher than the capitalization of the nine well-known car companies, even though their total revenues are more than 50 times greater than Musk’s enterprise. At the same time, each of the nine “old-school” companies produces electric cars, and, for example, unit sales of Renault and Nissan account for half of Tesla’s sales.
Tesla delivered almost 500 thousand cars in 2020, showing a sales growth of 36%. And Volkswagen sold 5.3 million vehicles over the same period, including 212,000 electric cars, a 158% increase over last year. By the way, Tesla sales in Europe dropped 10%, and in Germany, they dropped 36%, although the local market grew twice as much.
Tesla compared to other automakers in terms of R&D expenditures.
Capital expenditures and EBITDA margin
A buyer of Tesla shares acquires a stake in the company at a multiple of $1.5 million for every car sold. General Motors stock trades at a multiple of $9,000 per car sold in 2020. Do you still think Tesla is reasonably priced right now?
Musk’s brand fans believe his company is exceptionally financially superior, but Tesla’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margins are less than those of Volkswagen or General Motors. Do you think Musk is the only one investing in the future? However, each of the corporations mentioned has more CAPEX than Tesla. The company alone is a massive bubble of hundreds of billions of dollars, and there are plenty of similar companies on the market.
- The shares’ value is primarily determined by how investors feel about the issuing company. Expectations regarding the company’s success are one of the most important variables that impact the share price. The demand for Tesla shares on the exchange is based on analyst earnings expectations (or loss).
- Stock market forecasts and prices also depend on the level and expected evolution of interest rates. After all, when interest rates are low, investors will dare to take more risk to obtain higher profits and find it easier to enter the market.
- The sector in which a company operates is also a factor that can cause its price to fluctuate. A thriving company in a troubled sector will be negatively affected by the image of that sector in the market. We’re talking about financial performance, which has been a lot less predictable since the 2008 financial crisis. Because of the industry’s drastic developments, Tesla shares price on the stock exchange might potentially grow or decrease. Share price fluctuations might be influenced by fresh product releases or changing customer preferences. Another excellent opportunity to increase its value is the consolidation of the sector. A company that acquires other companies in the same industry can establish itself as a market leader and dominate the market.
- In a broader context, the overall evolution of markets can increase or decrease security value. For example, in volatile markets, as they were during the financial crisis of 2008 and 2011, even healthy and promising assets were subject to declines while fundamentally they were fine. Conversely, during periods of euphoria, the entire market participates in growth, which is not economically justified.
- Major economic and political trends can cause the stock market to panic, lull, or cause the entire market to rise or collapse because of favorable or disturbing macroeconomic events. In addition, a country’s fiscal, budgetary, and especially monetary measures have a significant impact on investor behavior.
- Consumer habits can also affect share price, and this applies to the Tesla situation as well. Some such opportunities are cyclical. Specific sectors that have had to restructure can come out of a slow growth cycle through more consolidation. Other opportunities related to consumer habits are more structural. This applies to companies in the education sector. As developing countries move from an agricultural to an industrial and service economy, there is a structural need for better education. These companies may then be in strong demand on the stock market.
Some companies are more susceptible than others to exchange rate changes. For example, a rise or fall in the exchange rate will affect the stock market price, turnover, and profitability of a company that derives a large part of its income from exports.
Thus, the stock market price depends on internal factors: balance sheet structure, profitability, expected revenues, the share of turnover in exports, innovation potential, market position relative to competitors, and assets. But price dynamics also depends on external factors: the political and macroeconomic situation and the development and perception of the company’s sector. Consequently, the investor must take into account and properly analyze all of these factors.
In 2020, Tesla was one of the few companies that managed to make big profits in a pandemic. A few days ago, Tesla Shares hit record highs, making Tesla CEO Elon Musk the richest man in the world, surpassing Amazon CEO Jeff Bezos. Based in Palo Alto, California, USA, Tesla is one of the world’s most famous and revered brands.
Tesla shares are rising in value as the company’s earnings continue to increase quarter after quarter. Today, Tesla is the world’s largest manufacturer of high-tech cars. Anyone who has anything to do with the industry knows the name of this American company. If Tesla’s meteoric march continues, there is no doubt that its shareholders will reap huge profits in the future. So what is the outlook for Tesla (TSLA) Shares? Below is a chart for 2021:
Incredibly, Tesla shares soared over 700 percent during the 2020 pandemic, while other firms struggled to stay afloat. By 2021, a $15,000 investment in Tesla shares would have grown to more than $105,000. Those aren’t the most thrilling numbers to anticipate. The company claims it expects to raise production by almost 50% in 2021. Tesla shareholders will earn even more as a result of this.
The company’s total revenue in 2020 was $31.5 billion, which was enough to bring its total value to more than $800 billion. Such numbers mean that the company has enormous potential to challenge Apple and Google, as Tesla plans to reach a $1 trillion capitalization in the near future!
Another forecast implies lateral market movement until the end of summer 2021, with a probable approach to the trend line. The shares’ value is expected to vary between $480 and $790. Furthermore, positive sentiment will rule the market, and the chart continues to develop in the primary trend’s direction. A break of the critical level of $968 and fixation over $1,000 will imply upward movement. Such an arrangement is quite possible in November-December 2021.
In the table below, you can see the possible prices for 2021.
|Date||Price of Tesla’s Shares|
As of this article, the price per Tesla share is $623, which falls within the price range for June 2021.
CNN shares the following,
“Ark Invest, run by the influential Cathie Wood, expects Tesla to reach at least $3,000 by 2025. That’s a rise of more than 350% from Friday’s close — and more than double Ark’s own $1,400 price target it set last year. Even in the worst-case “bear” scenario, Ark thinks Tesla shares have an absolute bottom of $1,500 for 2025, analyst Tasha Keeney wrote in a note Friday.”
Another long-term prediction by CoinPriceForecast.
Keep in mind that such long-term predictions are approximate and cannot be considered as investment advice.
Tesla & Chinese Electric Car Industry
China is one of the most important & promising markets for Tesla. Share prices could change significantly if the company cedes this market to competitors. Below you can see a chart that shows the electric car market in 2019 & 2020.
Plug-in electric sales
As of 2020, only the European market was more massive than the Chinese market. Europe is undoubtedly an important market for Tesla, but not as important as China. First of all, the potential demand in China is much higher than in Europe because of the number of people. Secondly, Europe is filled with industrial concerns such as Mercedes, BMW, Volkswagen, Nissan, Renault, etc.
In recent months, the brainchild company of Elon Musk has faced great difficulties in China. In March of this year, the Chinese government banned military personnel and employees of strategic state-owned companies from using the company’s electric cars. The authorities were concerned that the cameras and sensors installed on the manufacturer’s cars could record and store information, meaning they could gather confidential information. In response, Tesla CEO Elon Musk said during a discussion at the China Development Forum that the company’s cars are not used for espionage in China.
In April, during a car show in Shanghai, a Chinese resident demanded a refund for her car, claiming that malfunctions in the car’s braking system almost cost her parents their lives. Tesla representatives had to apologize. Chinese authorities recommended the company listen to complaints from Chinese consumers.
According to Reuters, Tesla abandoned plans to buy land and increase production in China this March. Previously, the company had intended to expand exports of the Tesla Model 3 made in China to other markets. According to the agency, the rejection was due to tensions between China and the U.S. and the current 25% duty on Chinese-made cars imported into the U.S.
Tesla’s Rivals in China
Xpeng Motors, an electric car startup founded in 2014, closed a $500 million investment round with investors including Aspex, Coatue, Hillhouse Capital Sequoia, and Capital China, the South China Morning Post reported. Last November, Xpeng received $400 million from a group of investors led by Xiaomi (with which the startup will develop technology to control car features through a smartphone). Other shareholders include IDG Capital, Foxconn, and Alibaba. The total amount of investment raised is about $2.2 billion. The next step could be an offering on the American NASDAQ exchange, following the example of two other Chinese electric car manufacturers, Nio and Li Auto. The former was able to raise $1 billion in an IPO in 2018. Even though, Washington Post notes that more than 400 companies manufacture electric cars in China, Xpeng is called a major competitor to Tesla because its cars are similar to Tesla models.
By region, electric car sales data show how much the Chinese market has overtaken the U.S. and European markets. At the end of 2019, according to the International Energy Agency (IEA), China had 2.58 million pure electric vehicles (BEVs) and 0.77 million hybrid vehicles (PHEVs), compared to 0.97 million and 0.78 million in Europe and 0.88 million and 0.57 million respectively in the United States. Worldwide, 2.1 million electric vehicles (BEVs and PHEVs) were sold in 2019, bringing 7.2 million units. So far, this is only 2.6% of global passenger car sales and about 1% of the total number of cars in the world. But this year, according to the forecasts of IEA, the share of electric cars will account for 3% of global sales. In the future, the percentage of electric cars will continue to grow. For example, look at this plug-in vehicle monthly sales diagram.
Plug-in monthly sales
The comparative development of the Chinese electric car market is also evidenced by the data on the infrastructure for recharging electric cars. China accounts for 37% of all standard home charging stations, 52% of similar public stations, and 82% of all public EV fast-charging stations.
Plug-in vehicle markets
As the global infrastructure develops, so will demand, and Chinese companies may well begin to expand. There was a time, writes Forbes, when American and European automakers did not consider their Chinese counterparts to be competitors, pointing to quality problems. But in electric cars, the difference in technologies is not so evident as the difference in price (Chinese electric cars are cheaper than American, European, or Japanese analogs).
Chinese electric cars can quickly take over the global market as affordable Japanese models did in the 1970s and 80s. First, however, we should not forget China’s advantages, such as its leadership in lithium production (about 51% of the market (by comparison, the U.S. has only 2%) and in cobalt production (60% of the market). These are the main components in the production of batteries for electric cars.
The main reason American highways and European autobahns are still not flooded with Chinese electric cars is politics, Forbes notes. Plus, European auto giants, especially in Germany and France, the countries with the largest car markets, have enormous political influence and actively protect their interests.
If a free market governed the world based on the principle of the best value for money, Chinese electric cars would have already given American and European executives many sleepless nights, Forbes concludes. But politics and economic protectionism are holding them back for now. It is unknown how long this state will last on the market, but it’s unlikely to last forever: one day, the dam will break, and a wave of relatively cheap Chinese electric cars will overwhelm the world. At that moment, Tesla’s shares may be nosedive.
You should never forget that Elon Musk’s company is a wild card. Tesla CEO Elon Musk’s eccentric personality has enhanced its innovation, but it has also raised significant investor worries. Some claim, for example, that Musk deliberately deceived investors into purchasing Solar City. In any case, the deal failed, and there is still a cloud of suspicion hanging over it. Such events in Elon’s life are more than enough to make investors wary about Tesla’s CEO. (share prices might drop)
On the other hand, Tesla dominates its league. Innovative ideas and technologies set the tone for the whole industry. The company is the only automaker that is putting all its efforts into developing electric cars. As electric vehicles gain traction and more people switch to them, this strategy may provide significant returns for investors. This tendency will only continue to grow in the coming years. Experts anticipate that electronic engines would power most of the world’s automobiles over the next 5-10 years; if this forecast holds true, Tesla’s shares may skyrocket. You’re betting on the future when you buy the company’s shares – from environmentally friendly automobiles to greener battery and component manufacturing. This trend will develop as well.
Once you’ve bought Tesla shares, you might want to diversify your portfolio with other assets. eToro provides a wide range of products, including ETFs, commodities, FX, and cryptocurrencies such as Bitcoin. In addition, these assets can be acquired or exchanged without paying a commission.