Launched in 2003, Tesla has been a trailblazer in the electric vehicle (EV) space but now also makes money by manufacturing energy generation and storage products like batteries, solar panels, and charging accessories, software and services to support its EV owners.
Headquartered in the US state of Texas, the company operates six factories across three continents and employs more than 100,000 people.
It went public in 2010 and is listed on the US-based NASDAQ exchange under the ticker symbol TSLA.
Tesla’s current market capitalisation is over US$600 billion, with each share valued at around US$190 after a recent dip.
Discover more about how to buy Tesla shares and background facts on the stock’s performance.
(Related: Comparison Of All Online Brokers In Australia).
What Is The Tesla Outlook For 2024?
Sage to say, Tesla stock hasn’t started 2024 on a high.
The company lost more than US$80 billion in market value in one day, following its fourth quarter earnings update on January 24.
The share price had already been in decline, primarily driven by further discounting from the EV maker, which lowered the cost of its vehicles in the Chinese market by between 3-6% in response to increased competition.
Did You Know?
Tesla remains the most valuable car company in the world, but it’s no longer the largest EV car seller by volume. Chinese company BYD delivered 526,400 EVs in Q4 2023 compared to Tesla’s 484,500.
So, narrowing profit margins were already a concern.
Then, Musk failed to put investors’ minds at ease during Tesla’s Q4 earnings call, revealing that revenue rose just 3% year over year despite strong growth in vehicle sales.
He also called on the US Government to establish “trade barriers” lest Chinese carmakers “pretty much demolish” global rivals.
Did You Know?
Earlier in January, Musk took to X to argue he should have more influence at Tesla in exchange for his efforts to make Tesla an AI and robotics leader — to the tune of 25% share ownership.
The move polarised investors, with many viewing it as a cash grab from a billionaire whose net worth (and capacity to shell out on social media platforms) comes primarily from Tesla stock.
Year-to-date, the TSLA share price has plunged over 20%.
Defensive price-cutting and intense competition in the EV market are not only hitting Tesla’s market value. Share prices and market valuations of many EV companies have slumped globally, including Vietnam-based VinFast; China’s Neo and Leapmotor; European maker Polestar and US-based Lucid, Fisker and Canoo.
Tesla woes this year could also be exacerbated by:
- China’s less-than-stellar economic growth—which was at one of its lowest levels in 2023 (5.2%) and is expected to be around 5% in 2024. Chinese consumer sentiment is poor, and any further shocks to the Chinese economy could further dampen Tesla’s sales in this major market.
- Supply chain disruptions due to the Red Sea attacks by Yemen’s Houthi rebels, which caused significant delays affecting production at Tesla’s German factory, prompting the company to pause production for two weeks from January 29 to February 11, 2024.
Past Performance Of Tesla Stock.
You can’t talk about Tesla’s share price without a deeper dive into its CEO Elon Musk, celebrated as a genius by some and largely credited with attracting a substantial base of retail investors.
Important! Previous performance does not guarantee future returns.
Musk’s prolific tweeting and an almost cult-like following have been a huge factor in the Tesla brand gaining traction and the stock’s strong performance in recent years.
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It’s viewed as the main factor behind a leap in Tesla’s share price starting in 2020 — a 10X gain within a single year — a surprising uplift considering 2020 was the first year the company turned a profit.
Its EV sales picked up on the back of an expansion into China, and it ended 2021 with a net income of over US$5.5 billion.
Weakening demand and concerns about profits were key reasons for the investor selloff in 2022 and closer scrutiny of whether the company was overvalued.
Tesla also completed a 3-for-1 stock split in August 2022 to attract investors, which lowered the price of each share.
In what was seen as a signal of its decline, Tesla discounted its vehicles in 2022 by offering hefty rebates, a rare occurrence for the company.
What Were Tesla’s Key Missteps Of 2023?
It was also the year Musk made his seemingly ill-fated move to purchase Twitter — his handling of which has been widely criticised and further dampened enthusiasm among Tesla investors.
For most of 2023, the TLSA share price has been rising strongly. In June, it was up over 110% for the year.
Tesla’s Q3 results for 2023 showed that profits were down year over year, and its operating margin was 7.6% — a large reduction from 17.2% at the same time last year.
Production costs and increased expenses related to its long-delayed Cybertruck, AI and other R&D projects were cited as causes.
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Tesla (TSLA) Facts & Figures.
In a world first, Tesla’s all-electric Model Y became the bestselling car globally in 2023, beating out popular petrol-powered models from Toyota like the Corolla and Hilux.
However, while it’s the most highly-valued carmaker, it’s far from the largest car company by total sales or profits.
A multitude of other electric vehicle brands/models exist — 58% of EV sales globally in the second quarter of 2023 were attributed to brands outside the top three competitors (Tesla, BYD Auto, and Volkswagen).
While Tesla is often the go-to EV model for US and Australian consumers, China and Europe are the largest markets for sales of battery electric vehicles (BAVs) right now.
Chinese company BYD Auto Co. Ltd. poses one of the biggest threats, growing its sales by 96% in Q3 2023 compared to the same quarter in 2022 – greater than Tesla’s 83% year-over-year increase.
The fact that the market size continues to expand also creates more opportunities for competitors.
What Do Tesla’s Performance Metrics Say?
Here are the facts you’d find on Bloomberg on 1st February 2024.
|30-Day Average Volume
Why Buying Tesla Stock Is Not As Simple As Buying ASX Shares.
You must take into account a unique set of parameters when buying shares on the US share market. Make sure you understand them well before you dive in.
1. Currency Conversion Fees Can Screw You.
You can’t buy Tesla shares (or any US equity, for that matter) using Australian Dollars.
Double-check the markup, as some brokerages slap on a hefty spread for the privilege.
Selfwealth, for example, is very sensible, charging a 0.6% fee per side.
Stake’s conversion fees are more expensive, at 0.7%.
eToro, meanwhile, will shave 1.5% per side (but offer a 50% discount once you deposit more than $25,000).
2. Currency Fluctuations Can Screw You Even More.
Keep in mind that investing in Tesla exposes you to fluctuations between Australian and US currencies.
When you buy Tesla shares in Australia, you need to exchange your Aussie dollars for USD — so the exchange rate plays an important role in your gains or losses.
Paying more for your shares can impact your ability to take profits later, especially if the AUD strengthens at the time you want or need to sell your shares.
3. You’ll Need To Navigate Timezone Differences.
Australia is probably the least convenient place in the world for trading US shares.
Some investors prefer to trade during market hours, so they make the effort to stay up or wake up early. They like the security of knowing live prices, as these can jump when the market opens.
However, some brokerages (e.g., Selfwealth) offer pre-market trading, meaning you can react to off-hour news and events by placing your orders before the market opens.
Comprehensive platforms (e.g., CMC, eToro, IG) offer pre-market and post-market trading.
How To Buy Tesla Stock In 3 Steps.
You can buy shares in Tesla and other US companies as an investor in Australia by using online share trading apps that offer access to the NASDAQ stock exchange — many popular online brokerage apps available to Aussies support this major market.
Here’s a three-step guide to getting started.
1. Have Reasonable Expectations.
Buying and selling shares involves risk. Only risk capital you’re prepared to lose.
Remember that Tesla’s past performance does not guarantee future returns. Do your own research. Don’t rely on this guide to influence your decision to buy or sell Apple stock.
Before you trade TSLA stocks, consult a professional, ASIC-licensed financial advisor or planner.
Work with them to understand your risk tolerance, clarify your financial goals, then decide whether Tesla stock can help you reach them.
2. Understand The Differences In Owning US Stock.
Be aware that while some Australian brokers operate under a model where you legally own your Australian shares, that’s not true when you buy US stocks:
- CHESS-sponsored brokers in Australia act as the middleman in executing your trades, but you’re the legal owner of the shares, as recorded by the ASX via a Holder Identification Number (HIN). This provides legal protections in the rare case that a broker goes bust.
- Custodial model is the traditional option for buying US shares. The broker holds your shares on your behalf, but you retain all the rights and receive your share of any returns. The model allows brokers to be more flexible, which can lead to lower fees and enables them to offer helpful features like fractional investing.
Buying Tesla stocks can affect how much tax you’ll pay. It’s wise to speak to your tax agent or accountant to understand the implications and possible offsets available, but generally you’ll need to:
- Pay a 15% US withholding tax on any dividends you receive from your Tesla shares.
- Pay tax to the ATO based on income received (dividends) and capital gains from TSLA stock.
You’re liable for this tax on top of your local Australian tax obligations. Consult a professional tax consultant for advice.
3. Choose A Broker And Sign Up.
You’ll need to engage a broker to buy and sell US stocks like Tesla.
Perhaps you’re already using an online share trading app to trade Australian stocks — if so, check whether they also offer access to US markets. Otherwise, do your research to find a reputable platform that does.
Pay attention to these three elements when choosing a brokerage app:
- Registered with ASIC (the Australian Securities and Investments Commission), with an Australian Financial License (check the fine print on the app’s website).
- Clear and reasonable fees. Minimising the costs of investing is a fundamental way to increase your returns. Dig deep into fees so you’re confident the app is affordable to use and you know how to avoid being gouged by unexpected costs—such as for withdrawing your funds or keeping an account active. It’s often helpful to do some rough sums based on the size and frequency of trades you expect to make.
- Features and user-friendliness. Depending on your experience and preferences, evaluate apps for how easily they help you manage your investments. Popular features include a robust knowledge base, demo accounts, social/copy trading, market news, and technical charting tools. Available order types and the use of leverage or margin will also vary between apps.
Did You Know?
Trading platforms like eToro and Webull offer fractional investing, meaning you can buy small portions of an “expensive” stock like Tesla. Instead of buying the full Tesla share (worth US$190 right now, you can invest as little as $50.
Follow the app’s sign-up processes to create an account. You’ll usually be asked to provide information such as:
- Your personal details; name, contact details and date of birth.
- Your tax file number (TFN).
- A form of ID to verify your details.
- Your bank account number if linking your accounts.
- A completed W-8BEN form is required by US tax authorities.
Complying with US tax requirements by completing a W-8BEN form reduces the tax you’ll pay on dividends from your Tesla shares from 30% to 15%. The process for completing and submitting this form varies between apps.
4. Add Funds And Place Your Order.
You’ll need to:
- Transfer cash into your online account.
- Search for ‘TSLA’ or the ticker symbol of an ETF/fund within the app’s interface.
- Enter the number of shares or the amount of money you want to spend, and choose from available order types (e.g., a market order executes the trade straight away at market rates, while limit/stop-loss orders let you pre-determine the price at which you’re prepared to buy).
- Hit ‘buy’ to execute the trade. It can take a few days before the transaction is settled and finalised.
Tesla Has Driven A Long, Potholed Road To Success.
Elon Musk is a Tesla co-founder, but he didn’t start the company.
Musk was an early investor in the company and joined Tesla’s board as chair in 2004. He ascended to the role of CEO in 2008 — somewhat contentiously — and positioned himself as Tesla’s public face. He’s currently the company’s largest single shareholder.
Final Thoughts On Buying Tesla Shares In Australia.
Buying a recognisable, high-value stock like Tesla can seem like a smart move on the surface, but it’s critical to objectively gauge whether TSLA represents good value and aligns with your investment goals, the broader make-up of your portfolio, and your risk tolerance.
Don’t go in with unrealistic expectations. Do your research and get professional advice first.