Important Information for U.S. and U.K. Investors Considering Tesla Investments

The content provided here does not consider your individual circumstances and should not be taken as personalized financial advice. Some of the products promoted come from our affiliate partners, from which we may receive compensation.

Download Our Guide: “How to Invest in Tesla”

Capital at Risk: All investments carry varying degrees of risk, and it is crucial that you understand the risks involved. The value of your investments can go up as well as down, and you may get back less than your initial investment.

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Why Own Shares?

Before purchasing shares in a company, consider why you’re making this decision. Does the company have strong future prospects, and is its stock price likely to be volatile? Are there rumors of a takeover that could push the stock price higher? Perhaps the company is in a turnaround phase, and its stock price is starting to recover from its lows.

How to Buy Tesla Stock?

Once you’ve established your reasons for purchasing shares in a specific company, follow these steps:

Open an Account: Whether you’re an experienced trader or a beginner in the stock market, to buy Tesla shares, you’ll need to open an account with a regulated brokerage firm. The stock market today is highly competitive, with services for beginner investors ranging from online investment platforms managed by some of the biggest names in financial services to faster trading apps available on your smartphone or tablet.
Points to Consider Before Opening an Account:

Keep your ultimate financial goals in mind.
Be prepared for the ups and downs of the stock markets.
Try to keep transaction fees to a minimum.
Remember that investing in stocks may incur tax liabilities, such as when you sell part of your portfolio.

Questions to Ask Before Buying Shares:

Should I seek financial advice?
Am I comfortable with the risks?
What is my investment budget?
Can I afford to lose money?
Do I understand the company I want to invest in?
Am I protected if my platform provider/advisor goes bankrupt?

Where Is Tesla Listed?
Tesla’s stock symbol is TSLA, and the company is listed on the Nasdaq market in the United States. Nasdaq trading hours are 9:30 AM to 4:00 PM Eastern Time, Monday through Friday. You can purchase U.S. shares through most brokerage accounts. Buying shares in U.S. dollars involves currency conversion fees (typically around 1% of the transaction), unless you fund the purchase from a U.S. dollar account. Most brokerage firms also charge slightly higher transaction fees for purchasing U.S. shares compared to U.K. shares, but it’s worth comparing the fees across different brokers if you plan to regularly buy U.S. stocks. You’ll be required to complete a W-8BEN form (valid for three years), which allows you to benefit from a reduced withholding tax rate on eligible U.S. dividends and interest, from 30% to 15%. Holding U.S. stocks also exposes you to currency exchange risk. If the British pound appreciates against the U.S. dollar, your shares will be worth less in pounds (and vice versa).

Why Invest in Stocks?

Investing in stocks offers many attractive benefits for investors looking to maximize their long-term returns.

Long-Term Growth Potential: Historically, the stock market has provided higher returns than bonds or savings accounts, allowing investors to significantly grow their capital.
Portfolio Diversification: By investing in a variety of companies and sectors, investors can spread risk and reduce the impact of poor performance in a single company or sector.
Passive Income Through Dividends: Many companies pay regular dividends to their shareholders, providing a source of passive income in addition to potential capital appreciation.
Higher Return Potential: Compared to other types of investments, the stock market offers a higher return potential, albeit with increased risk. This allows investors to aim for significant gains.
Professional Management: Professionally managed funds, such as mutual funds or ETFs, allow investors to benefit from the expertise of experienced portfolio managers, reducing the risk associated with individual stock selection.

Does Tesla Pay a Dividend?

As of the end of 2023, Tesla does not pay dividends to its shareholders. The company retains 100% of its earnings and cash flow to reinvest in its business growth and cash balance.

Tesla is heavily investing in building additional gigafactories and increasing its production capacity. In 2023, it announced an additional $3.6 billion investment to continue expanding the Nevada Gigafactory. The company also plans to invest more than $5 billion in building a new gigafactory in Mexico.

Given Tesla’s ongoing heavy investment in expansion, it is unlikely to start paying dividends anytime soon. Therefore, it may not be the best stock for those seeking passive income for retirement.

Key Information Checklist for Tesla Stock Investors

Company Overview:

Full Name: Tesla, Inc.
Ticker: TSLA
Founded: 2003
Founders: Elon Musk, JB Straubel, Martin Eberhard, Marc Tarpenning, Ian Wright
Headquarters: Palo Alto, California, USA
Website: www.tesla.com

Key Financial Data:

Market Capitalization: Check the current market cap on a finance platform.
Quarterly and Annual Revenues: Review the latest financial reports.
Profitability: Gross, net, and operating margins.
Earnings per Share (EPS): Historical and forecasted data.
Cash Flow: Operational, investing, and financing cash flows.

Products and Services:

Electric Vehicles: Model S, Model 3, Model X, Model Y, Cybertruck, Semi.
Solar Energy: Solar panels and solar roofs.
Energy Storage: Powerwall, Powerpack, Megapack.
Autopilot and FSD: Autonomous driving technologies.
Superchargers: Global network of fast-charging stations.

Innovation and R&D:

R&D Investments: Current spending and trends.
Emerging Technologies: 4680 battery, AI for autonomous driving.
Partnerships and Acquisitions: Latest tech partnerships and acquisitions.

Stock Performance:

Price History: 1-year, 5-year, 10-year history.
Volatility: Beta compared to the market.
Average Trading Volume: Daily transaction average.
Dividends: Current policy (Note: Tesla currently does not pay dividends).

Competition and Market:

Main Competitors: Rivian, Lucid Motors, NIO, Ford, General Motors.
Market Share: Tesla’s position in the EV market.
Market Trends: EV market growth, environmental regulations, government subsidies.

Leadership and Governance:

Board Members: Appointments and backgrounds.
Company Vision and Strategy: Long-term goals, tech roadmap.
Transparency and Communication: Quality of investor relations communications.

Risks and Challenges:

Regulation: Impact of environmental and trade regulations.
Raw Material Fluctuations: Prices of lithium, cobalt, nickel.
Production Challenges: Supply chain issues, production ramp-up.
Competitive Risk: Innovations and strategies of competitors.

Sustainability and ESG:

Environmental Initiatives: Carbon impact, battery recycling.
Social Responsibility: Working conditions, community engagement.
Governance: Corporate governance practices, board diversity.

Expert Analysis and Opinions:
- Brokerage Analyses: Recommendations from major brokerage firms.
- Analyst Reports: Growth projections, price targets.
- Influencer Opinions: Views from financial and tech influencers.

Competition and Comparison

The online trading platform market is highly competitive. Users of these services often consider options like Saxo Bank, which offers fully online account opening with competitive rates on Euronext Paris stock purchases, as well as ProRealTime, known for its professional trading software and French customer service. N26 will need to differentiate its offering to attract and retain a loyal user base.

Disclaimer: Always consider seeking independent financial advice before making investment decisions. Investing involves risk, including the potential loss of capital.