How to Buy Tesla Shares

We cover the car company and how to buy Tesla shares.

Updated: May 21, 2024
Matt Crabtree

Written By

Matt Crabtree

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Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.

Warren Buffett (Source).

Tesla enthusiasts are committed, whether they are lovers of the firm because of Elon Musk himself or because of the vehicle's design and performance. It's easy to understand why: Tesla (TSLA) is a game-changer in a wide variety of industries with its innovative products (such as solar roofs and cars with built-in bioweapon defensive modes).

Investment gains, as a result, have been substantial. Recent financials show that Tesla's sales increased by a stunning 80% year over year ― although it has felt 2022’s effects of Elon’s Twitter buyout and the worldwide recession.

If that has piqued your interest and you want to invest in TSLA so you may profit from the company's meteoric rise, here is all you need to know about reasons and how to buy Tesla shares.

Need to get TSLA shares? Jump to the Sum Up section and buy now.

Reasons to Buy Tesla Shares

  • Tesla is a company that specialises in electric cars ― their development, production, and sales, as well as renewable energy generating and storage.
  • Major automakers like Ford Motor Co. (F) and General Motors Co. (GM) are competitors to Tesla, as are up-and-coming electric car manufacturers like NIO Inc. (NIO).
  • The financial year 2021 for Tesla concluded on December 31. The company made £4.6 billion in profit on sales of £44 billion.
  • There was a drop of £83 billion in Elon Musk's net worth in 2022, as of the 22nd of November.
  • Tesla reported their profits for the third quarter of 2022 on October 19th, 2022. Shares of Tesla fell following the news, despite the fact that earnings per share and vehicle sales were above estimates.
  • Tesla announced a 3-for-1 stock split on August 5, 2022, and on August 25, 2022, trading started reflecting the split.

Performance update

Be frightened when others are greedy, and greedy when others are scared.

Warren Buffett
Tesla Shares

That comes from Warren Buffett, a legendary value investor. Before discussing the reasons to purchase Tesla stock, it is vital to grasp the counterarguments.

In fact, Tesla's stock was down more than 50 per cent at the end of 2022, and many investors were fearful, wondering whether the decline will continue.

Reduced Market Share?

One of people’s greatest worries about Tesla is that its EV market share is gradually declining. In the last three years, Tesla's market share has decreased from 29% to 25% and then to 21%, according to INSIDEEVs' articles on the world's top five EV automobile manufacturers based on sales volume.

The decline also makes sense. Many investors do not anticipate Tesla's market share will collapse to zero, but its sales will continue to decline in the near future, especially in China, unless something miraculous occurs.

From hours spent studying hundreds of vehicle reviews and speaking with EV owners, the consensus is that Tesla automobiles are decent but not remarkable. In several of their submarkets, there are superior automobiles.

A widespread feeling among those who can afford a Tesla Model S is that they would prefer to get a Porsche Taycan. Hyundai and Chevrolet automobiles are much less costly than the Model 3 for the budget-friendly alternatives for which the Model 3 was originally intended.

Neither do many investors anticipate Tesla's Cybertruck to do very well, given that Ford's F-150 electric pickups on the market have a lengthy waiting list.

Consider the other well-known automakers that are developing electric vehicles, such as Mercedes-Benz, BMW, and the Volkswagen Group. Many of these automakers have decades of experience creating automobiles and are adept at producing comfortable, enjoyable-to-drive vehicles.

These firms can and are rapidly entering the electric car industry to reclaim the market share that Tesla formerly had.

Why You Should Buy Tesla Stock

Tesla seems overpriced in light of Audi, BMW, Ford, Chevrolet, Hyundai, Mercedes-Benz, and other automakers unveiling new flagship electric vehicles simultaneously.

The latest news concerning Tesla's stock decline and the market's pessimistic outlook has sparked the curiosity of many. Considering Tesla's 50% decline this year, is the firm now a wonderful bargain?

According to some research, sure, it is. There is, nevertheless, an argument to purchase Tesla stock for these 3 reasons.

  • Strength of mission
  • Great financial statements
  • Highly valuable brand

Let’s go through each reason

1. ✔️ Tesla Is More Than A Car Manufacturer

Tesla may not have as much expertise as other automakers in producing high-quality vehicles. Nonetheless, they have the advantage over all other manufacturers in terms of electric car infrastructure. The importance of Tesla's supercharger network and energy goods in an EV-dominated society should not be forgotten.

In addition, one of the benefits of being headed by Elon Musk is that the corporation is more concerned with its mission to alter the world than with making a profit. Tesla is not a business that is prepared to become bureaucratic and content with its existing profits.

You should be enthused about Tesla's prospects in self-driving automobiles and energy goods over the long haul. Tesla will continue to revolutionise the globe, and EVs are just the beginning.

2. ✔️ Impressive Financial Statements

Just as with Amazon, the pandemic let Tesla reach a value of a trillion dollars (£830B) during the epidemic.

Upon seeing Tesla's financial figures, many investors will be pleasantly surprised. Especially if you do not actively follow Tesla, so you might believe for a long time that the firm had just lately become slightly profitable.

Many investors will discover, however, that Tesla is rapidly gaining revenue parity with other well-known manufacturers and becoming one of the most profitable automakers. The value of Tesla's assets has been growing annually at a higher pace than its obligations, and the same can be said for its revenue.

This strengthens Tesla's position throughout the recession and post-pandemic lockdowns. With the amount of capital Tesla has and the amount of money Tesla earns, the corporation has the means to continue revolutionising the globe.

The stock market value for Tesla, Inc. (TSLA) in January 2020 was £97 billion. This sum surged to £550 billion by year's end. Then, on October 25, 2021, Tesla's shares hit a market value of £830 billion, a distance it had previously covered in less than a year.

Tesla's stock has shocked investors with its meteoric ascent in a short period of time. It also sparked debates on whether or how Tesla would be able to maintain the pace. Just as with Amazon, the pandemic let Tesla reach a value of a trillion dollars (£830B) during the epidemic.

3. ✔️ Priceless Branding

The performance of Chinese electric vehicle manufacturers BYD Auto and SAIC Motor was a worry many investors had when examining EV market share statistics. According to INSIDEEVs, BYD and SAIC are ranked second and third, respectively, in terms of EV market share.

The initial thought could be that Tesla had to thrive in China since many investors believed that German automakers would dominate the European market and that many consumers would eventually choose the brand they've owned their whole life.

As I saw BYD and SAIC's dominance in the Chinese market, some investors began to question Tesla's performance. When they started to consider the different automobile manufactures, scepticism regarding Tesla was swiftly replaced with reassurance for some.

Many investors have never heard of BYD or SAIC before investigating EVs, even those who are avid auto enthusiasts who often watch car reviews.  Tesla, on the other hand, is often mentioned, and the firm has generated marketing akin to that of Disney.

There is an abundance of folks who like Tesla. Teslas have joined Porsche, Mercedes-Benz, and BMW at the top of their wish lists, despite the fact that the majority of us cannot afford them.

Many investors anticipate a resurgence in Tesla's market share as more millennials my age graduate and find employment despite recessions. Tesla has become a well-recognised brand, which is usually a positive development.

How to Buy TSLA Shares — 1. Open Trading Account

If you want to buy Tesla stock, you'll need a brokerage account. If you're not already set up with a brokerage or investing app, we suggest you check out the ones we've listed below. Keep a watch on account minimums and fees, although in the present day, most brokerages let you trade without commission.

A person's long-term financial goals should be taken into consideration while selecting an investing account.

If saving for retirement is important to you, you should think about opening an ISA. Capital gains taxes may be avoided in exchange for limitations on how the money can be spent. There might be supplementary charges or taxes imposed on withdrawals that are made at inconvenient hours or for unintended uses.

If you're saving for something more abstract, like retirement or a house down payment, a taxable investment account that's easy to access is your best bet.

How to Buy TSLA Shares — 2. Set Financial Plan 

If you’re not failing, you’re not pushing your limits…

Ray Dalio, Principles (Source)

The challenge arises when trying to create a strategy that is grounded in reality.

When a stock's price is falling rapidly and the media is reporting nothing but bad news, that's when many prefer to purchase. This is the present state of Tesla, and from what we can see, it's an interesting moment to purchase Tesla stock and keep it for the long term.

Nonetheless, you need to conduct your research and form your own judgement before making any kind of investment. What are your own feelings on Tesla? Do you believe it would be wise to put money into this company?

It's quite unlikely that Elon Musk would accept a blank check from you. That means you need to ask yourself certain questions to determine how much of an initial investment you can make in TSLA.

How much cash do you have at your disposal? Don't go into an investment in Tesla without first making sure you've thought of everything. You should be able to save for retirement, cover your regular bills, and set aside some money in case of an emergency. When you've paid for them, the funds may be used toward other goals, such as buying Tesla stock.

What does TSLA cost right now? Tesla stock is now a far more reasonable investment opportunity. Until recently, one Tesla share was worth about £250. Some will, therefore, consider it together with their gold assets or other diverse holdings.

Where do you plan to invest your money? Both lump sums and regular, smaller payments made over time are common investment strategies. Second, you may try dollar cost averaging to buy shares over a longer period of time and perhaps spend less per share in the long run. Rather than letting you sit on your money until you reach some arbitrary number, it invests it in the stock market right now, where it may continue to increase.

Where are your additional financial resources located? You probably won't put all of your spare cash into Tesla shares. In light of this, you need to consider how it fits in with your other financial commitments and long-term objectives. 

How to Buy TSLA Shares — 3. Review Performance

Do your research on Tesla's finances, performance, and forecast before you purchase their shares or any stock. A company's annual report (10-K) and quarterly reports (3-Q) are good places to start (Form 10-Q). Companies like TSLA that are publicly traded are obligated to disclose extensive financial data in these.

You may discover these filings by searching the Securities and Exchange Commission (SEC) database or visiting Tesla's investor relations website.

You may also get advice from professionals if you want. Independent analysts like Morningstar also give in-depth comments on the markets and sectors that are covered by brokerage firms.

You may determine how much of your money you wish to invest in Tesla by combining financial facts with professional advice.

How to Buy TSLA Shares — 4. Order Type

You may begin purchasing Tesla shares after you've determined the total amount you're willing to invest in the company. To purchase Tesla stock, visit your broker's website and search for the ticker symbol “TSLA”, then input the desired number of shares and associated dollar amount.

A market order will buy shares at the current price, but if you want to buy TSLA only if the price drops below a specified level, you may use a more complex order type, such as a limit or stop.

During regular trading hours on the Nasdaq from Monday through Friday, 9:30 a.m. to 4:00 p.m. ET is when you may purchase Tesla. You may keep placing orders even before the market opens or after it closes if your brokerage supports pre-market and after-market trading. You may be certain that any orders you send in while the market is closed will be executed as soon as it reopens.

How to Buy TSLA Shares — 5.  Evaluation 

It's important to keep tabs on your investments, whether in Tesla or anything else.

The annualised rate of return is a good place to begin. With this information, you can evaluate TSLA's performance over the last year in relation to that of similar firms and investments. To ensure that Tesla is still headed in the right way, you may check in on the company's financial records.

Besides gauging TSLA's progress against the S&P 500 and the Nasdaq Composite Index, you may also evaluate it against other equities. Using this data, you can see how Tesla is doing in relation to the market as a whole.

To rebalance, one makes purchases and sales of assets until the portfolio's holdings are again equally distributed. Rebalancing may also be used to adjust the portfolio's allocation among its securities and asset classes if the strategy or risk appetite shifts.

Shares

Several variables, such as transaction costs, personal preferences, and tax implications (for instance, the type of account transactions are coming from and whether capital gains come into effect at what rate), dictate how often a portfolio should be rebalanced.

Age is also a factor. Rebalancing your portfolio may not be as important for those still under 40, but it will be more important if you are nearing retirement and want to maximise your profits. An annual review is reasonable, but you may want to wait longer if some of your assets haven't grown much in one year.

Furthermore, it may be required to reassess an asset portfolio if individual situations alter. You can use the following guidelines to rebalance your holdings as an introduction, even if your own tastes differ.

  • Track: Be careful to maintain tabs on the entire cost of your portfolio as well as the cost of individual securities (like TSLA shares) if you have just agreed on a superb asset allocation plan and purchased assets across all asset classes in line with that strategy. The data may be used as a historical record to compare your portfolio's long-term performance to that of the market.
  • Make comparisons: Examine the total and individual asset values in your portfolio at a later time. The relative weight of each fund may be calculated by dividing the current value of each asset type by the total value of the portfolio. Verify this total versus your first estimations. Do you know whether there are any significant changes? In the absence of investment expertise and a pressing need for portfolio funds, sitting on them may make the most sense.
  • Adapt: Multiply the current value of your portfolio by the original weightings you provided by each asset class (in per cent) if you think rebalancing your portfolio's asset allocation has changed its risk profile. The amounts to invest in each asset class to maintain your current allocation will be determined by these results.

Ways of Selling Tesla Shares

You may sell your Tesla stock by visiting your brokerage's trading app and entering the desired number of shares or dollar amount. Whether you want to sell at the current price or wait for a certain one, you may choose the appropriate order type.

Unless the shares are housed in a tax-deferred account, you will likely have to pay taxes on any profit you earn from selling them for more than you paid.

Capital gains taxes might change depending on how long you own your TSLA shares. Consult a tax expert about the tax implications of selling your Tesla investment if you expect to earn a large profit.

Selling TSLA Stocks, 3 Simple Steps

Stock Market Tip #1: Realizing When to Cash Out

Think carefully about whether or not to sell based on your investing goals, your time horizon, and your tolerance for risk.

Fear and aversion to losing, however, may prove to be significant roadblocks. Stocks may be sold for both positive and bad causes. Be completely rational before you pull the trigger.

This might be because of the company's ongoing underperformance in comparison to the competition, poor leadership, or management decisions that you find unacceptable. You may have decided that your money is better spent elsewhere, or you may be accepting a profit to reduce your taxable income in the future.

Poor motivation often takes the form of an emotional reaction to short-term fluctuations in the stock market or individual events inside the company. The last thing you want to do when times become tough is making things even more difficult for yourself by giving up and running away. In other words, “Buy low, sell high”, as the old saying goes.

Keep in mind the original motivation for your stock acquisition if you're thinking about selling. Have you given any thought to the kinds of developments or news that would prompt you to make a sale? Go through your rationale to make sure you aren't behaving rashly.

Stock Market Tip #2: Decide on a Payment Type 

When selling stock, you have the same order options as when buying them. Using the right order types is crucial if you want to reduce the amount spent on purchasing stock. You, as the seller, should be concerned primarily with minimising loss and optimising profits.

Normal Orders

You may be certain that your order will be fulfilled in a flash at the prevailing market rate (market orders). There is a chance that the stock price may rise or fall between the time you make the purchase and the time it is completed, so the final price you get may be different from what you first anticipated.

The risk is that if there is a huge drop during the transaction execution time, for example, you will be unable to stop the sale of your shares at any price.

Order Limits

You may avoid this by making it such that your order will only be executed if the stock price hits or surpasses a certain limit price. Example: If you place a limit order to buy £11 worth of stock, it won't be executed until the price of the stock hits or surpasses £11 during trading. There is always the risk that the stock won't ever reach your desired selling price, preventing you from realising any profits.

Stop-loss Orders

Stop-loss orders are executed automatically when the price of the underlying security falls to the level set by the trader. If the share price decreases to your stop price (say, £8 for a share that is now £11), your order will be filled as a market order. Without a floor, you might be forced to sell at prices below your stop loss. In addition, even if you don't want to sell right away, a temporary price cut could help.

Stop-limits 

Here, you're in charge of setting the stops and limits together. If the bidding rate drops to £9, for instance, and you’ve set a limit of £7, your order will go through as a limit order as long as it is at least £7 or higher. The risk here is that you will be unable to sell the stock at all if it falls too quickly under this, as may happen in a volatile market.

Stock Market Tip #3: Finalise  

You cannot make a good deal with a bad person.

Warren Buffett (Source)

You need to place your order ticket or order to be placed using the broker's website or trading platform. Typically, the settlement date for a transaction is 2 working days after the order executes, and this is true across the board for most brokers.

The time needed to complete the exchange ticket is minimal. Select “sell”, fill in the stock's ticker, the number of shares, your order type, etc. 

Time-in-force options determine how long the sell order stays open. Choices can include, but are not limited to, the following (depending on the kind of order and the specific asset, such as cryptocurrency):

  • Regular day: If the transaction is not finalised and the order is not filled before the market closes, the transaction and the order will be cancelled. This is the normative launching point.
  • Cancel unless immediate: Orders with an immediate or cancel deadline suggest that the whole order, or at least the remaining unfulfilled portion of it, must be completed immediately.
  • GTC: To be clear, a “good-til-cancelled” order stays open until it is either filled or cancelled. Nonetheless, brokers often have restrictions on how long an investor may leave a GTC order open.
  • The fill or kill order type is often used in large-volume share transactions. The order will be cancelled if it is not fulfilled immediately in full.
  • On open / or on close: For the former, as soon as the market opens, trades begin at the opening price. For the latter, at the conclusion of trading, orders are executed at the previous day's closing price.

In most cases, the standard day setting should be OK as is. You will be able to place increasingly complex orders on the market as your stock trading expertise increases.

To avoid accidentally selling Goldman Sachs when you meant to sell Tesla, review your submission one final time once you've completed filling out the form.

Using an Index Fund to Invest in Tesla

Mutual funds and exchange-traded funds track an index, such as the LSE Index, aiming to mimic the performance of that index as precisely as possible. That's why some investors refer to indexing as a “passive” strategy.

There is no manager to pick and choose which stocks or bonds to incorporate and rebalance; instead, they buy all or a part of the companies comprising the index the fund tracks.

One disadvantage of putting all your money into a single company's stock is that you'll be vulnerable to huge swings in value. As a result, the vast majority of investors should place their money into diversified equity products like index funds or ETFs. Fortunately, TSLA is owned by a large number of funds.

Any investment in Tesla (or any single stock) might be risky.

…easiest approach to diversify your portfolio.

Diversifying your investments may help mitigate the negative effects of market fluctuations. Certified financial adviser Valerie Rivera recommends index funds as the “easiest approach to diversify your portfolio” since they comprise hundreds or thousands of distinct securities (CFP).

At the moment, TSLA accounts for around 1.5% of the S&P 500, so for every £0.80 invested in an index fund tracking the S&P 500, £0.12 of that dollar is allocated to Tesla. A Nasdaq index fund has Tesla as a holding worth over 4% of the whole portfolio, so if you're looking for an index with even more TSLA representation, this may be a good option.

You should see a financial adviser if you have questions about your investing goals, your risk tolerance, the amount of money you have available to invest, or the investment strategy you should use.

Best Index Funds to Track

To Sum Up — How to Buy TSLA Shares

Is Tesla Overvalued Compared To Other Automobile Manufacturers?

If you consider Tesla's diminishing market share and then compare Tesla's stock price to that of other manufacturers, you will discover something quite frightening. One of the primary reasons Tesla bears do not invest in the company is that it is highly overpriced relative to other manufacturers.

Tesla's P/E (price-to-earnings) ratio is about 40, while major automakers such as Volkswagen Group, Hyundai, and Ford have P/E ratios below 10. If four firms generated the same amount of revenue, but one was four times more costly than the other three, you would not purchase the most expensive company.

Obviously, this situation is more complicated than usual since Tesla is more than a vehicle manufacturer. However, the majority of Tesla's income still comes from the sale of automobiles; hence, Tesla must be compared to other automobile manufacturers.

If you’ve decided to buy, why wait forever to acquire Tesla shares, even if you are likely doing it as part of a long strategy?

For the fastest way to invest in TSLA stock in the UK, see the instructions below.

  • 🌐 Starting off, go to eToro.com and click the “Join Now” button to create an account. Create your account by filling in the required fields. Your capital is at risk.
  • 📰 Your next step before buying stock with your eToro account should be to confirm your identification and the billing address on file.
  • 💳 Third, put at least $50 into your trading account.
  • 🛒 Finally, buy TSLA. Enter “TSLA” into the search field, and then click “Trade” to purchase Tesla stock.

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FAQs

So, What's Going on with Bitcoin and Tesla?

The Tesla Car Radar: What's Going on?

Where Do Things Stand Between Elon Musk and the SEC?

How about the SolarCity Lawsuit?

Is TSLA Stock Split?

Can I Get a Dividend from TSLA?

What’s the Current Stock Count for TSLA?

Who is the CEO of Tesla?

Which Companies Have the Most Tesla Shares?

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