Tesla (TSLA) is an American manufacturer of electric cars located in California, in Silicon Valley in the United States. Created in 2003, the company is today managed by Elon Musk.
With a market capitalization of nearly $ 400 billion, Tesla has become the world's 2 nd carmaker in terms of valuation, ahead of Volkswagen and General Motors. The company was listed on the US Nasdaq Stock Exchange in 2010, at an initial price of $ 17 per share. In 2019, Tesla posted sales of nearly $ 25 billion .
Buy Tesla Stock in 4 steps
Tesla's growth prospects remain very strong for the years to come. This is the reason why many investors have positioned themselves to buy Tesla stock in recent months as shown by the recent surge in its stock market price. If you also want to take advantage of this bullish trend on the title Tesla, just read our guide that will explain co siness To Buy TSLA shares ,
But first of all, you will need to create an account with an online broker that offers trading in Tesla shares on its trading platform. On this point, it seems wise to us to use the broker to buy TSLA shares from eToro because it allows cash or leverage through CFDs ('Contract For Difference'), without paying fees (0 % commission).
Buy Tesla Shares (TSLA) -Tutorial
In this tutorial, we will see how to buy Tesla shares, through 4 steps. The 3 best brokers to favor will be presented to you, and we will explain the procedure to open a trading account and credit it and finally we will explain to you how to buy TSLA shares in a few clicks either in cash or by benefiting from leverage through CFDs.
Step 1: Open an account with a broker offering Tesla shares
The first step in buying Tesla shares is to choose a reputable and secure broker, offering TSLA shares on its trading platform . Our advice is to choose one of the 3 brokers who stand out in our guide, because of their financial strength and their registration with the stock exchange authorities.
Be aware that our preference goes to the broker eToro as they do not charge their clients any commission in the stock market on either buying or selling.
1.eToro: Best choice if you don't want to pay commissions
The broker eToro, was born in 2007 and already claims nearly 11 million customers in the world. Its trading interface is perfect for beginners due to its ease of use, both for cash and leverage transactions via CFDs.
The icing on the cake, there are no fees to pay on the equity markets, including on the US stock exchanges where Tesla shares are listed (Nasdaq).
Another advantage of the eToro broker is that it offers a social trading function ('copy trading') which allows the duplication of positions taken by other traders working at eToro.
In addition, the company is authorized by the main European regulatory authorities, such as CySec (Cyprus) and the FCA ('Financial Conduct Authority') in the United Kingdom, which shows its respectability.
- Broker regulated in several European countries
- 0% commission for trading Tesla shares
- No management fees
- Ideal trading platform for beginners
- Copy-trading function available
- Disadvantages :
- Little fundamental analysis on TSLA stocks
- Minimum deposit of US $ 200 upon opening
- Leverage limited to 5 on CFDs
2. Binck - The best choice for a successful trading platform
Created in 2000, Binck is a Dutch broker, approved by the Autorité des Marchés. Its trading interface allows access to most international stock exchanges, including the US Nasdaq stock exchange where Tesla shares are traded.
Binck is among the top 5 European online brokers in terms of transaction volume, providing access to more than 25 global stock exchanges.
Another advantage: the trading platform offered by Binck - ProRealTime - is very sophisticated, with many functionalities allowing in particular the placing of orders in real time , technical analysis and monitoring of open positions .
- Possibility to trade on ProRealTime
- Several leverage products available
- Total transparency on intervention costs
- Many titles available including Tesla
- Disadvantages :
- Commissions for trading stocks for cash
- No training offer
3. IG Markets - The best choice for using leverage with CFDs
Founded in 1974, IG Markets is one of the largest online CFD brokers and around the world. Today it has nearly 200,000 customers and operates in more than ten countries.
Regulated by the FCA in the United Kingdom, IG Markets notably offers a wide range of trading platforms, including MetaTrader 4 offering advanced trading tools, notably for technical analysis but also for the execution of stock market orders.
In addition, IG offers a complete training service to all its clients wishing to improve their method of trading in the financial markets.
- Broker regulated in several jurisdictions
- French leader in the CFD market
- Choice of advanced trading platform
- Possibility to create a demo account for free
- Disadvantages :
- The quality of training services
- Limited cash stock selection
Step 2: Open a trading account
As we said, the broker that we recommend among the 3 brokers that we have just presented to you is eToro, in particular for the fact that you will be able to buy on its trading interface the Tesla share without paying any commissions. In the rest of our example, eToro will be used as a reference to indicate the market to follow to open your trading account, then deposit funds in order to become a shareholder of the Tesla company.
In order, you must proceed to register on the website of the broker eToro.
You can click on this link to go directly to the eToro website . As you can see, all you have to do then is enter some personal information about yourself and accept the General Conditions before clicking on ' Create an account '.
Once you have created your trading account with eToro, it should be credited in order to be able to buy Tesla shares.
Credit your trading account
To do this, it is enough to pay an amount of only 200 US dollars (USD).
Different deposit methods are available: credit card (Visa, MasterCard, Maestro), PayPal, Neteller and Skrill.
You can also make a bank transfer, but in the case, the deposit must be 500 USD.
Step 3: How to buy Tesla stock
When your account is credited, you can then buy Tesla stock. You just have to search directly for the TSLA stock in the platform's search bar at the top of the screen and then right click on the 'Invest' button .
A new window then appears:
Via the eToro trading platform, one can buy the Tesla share for cash by clicking on the 'X1' button or with leverage via CFDs ('Contract For Difference'), the maximum value of which is set at 5. You want to do it, just click on the 'X5' button .
Note that this allows you to multiply by 5 the amount invested in Tesla shares compared to your starting deposit in your trading account from step 2 of our guide.
However, CFDs are generally recommended for experienced traders only as it is possible to lose more than your starting capital. It is important to be able to quickly neutralize your position in the event of a market reversal by using ' Stop loss ' levels where your position will be automatically cut.
Also note that the procedure for buying TSLA CFDs on eToro is in all respects similar to a traditional order to buy shares for cash. For that, you will use the window that we have already seen:
Then, please determine your ' Stop Loss ' and ' Take Profit ' levels, the latter corresponding to your profit target on the Tesla stock at the time you place your buy order.
Good to know: On eToro, many other actions are available. For example you can buy Apple stock , Renault shares and others.
Tesla Stock Price and Quotation
If you want to bet on Tesla , you can do so by placing your buy order on the Nasdaq market in the United States ( ISIN code US88160R1014 - ticker code TSLA ).
The stock has been listed on the Nasdaq since 2010 and available in the US Nasdaq 100 Stoxx Global 200 stock index.
The company's market capitalization stands at nearly 400 billion euros at the end of August 2020.
As of December 31, 2019, 79.85% of the capital is free float , the balance being held by Elon Musk, the CEO of the company.
Good to know : the Tesla share being an American company listed on the Nasdaq, it is not eligible for the PEA, reserved only for securities in the euro zone.
Tesla 5 Year Daily Chart - Source: TradingView
After rising more than 30% in 2019 , the price of Tesla stock accelerated its strong uptrend in 2020. The company's stock indeed hit a high of nearly $ 450 at the end of last August, with a price multiplied by more than 5 compared to the end of 2019.
Since the beginning of the year, the courses have progressed considerably. This explosion in the Tesla share price was notably catalyzed by the publication of better-than-expected financial results for the year 2020.
After hitting a record high of $ 450 during the summer of 2020, the Tesla share price appears to have taken a break in its uptrend but its potential remains intact according to financial experts as we will see.
Presentation of the Tesla Share
In the following lines, we give you some useful information about the Tesla business before you invest. We will start by telling you about its history, then its main activities and finally its future prospects.
The Tesla company was created in 2003 on the idea that sooner or later electric cars will interest the general public who are increasingly looking for alternative solutions to reduce their carbon footprint.
Today, Tesla is one of the largest automobile manufacturers in the world.
Tesla the world's leading electric vehicle maker, and the world's largest manufacturer in terms of market capitalization, although its production is only a fraction of the volume that leaves the factories of the mainstream big automakers.
In 2019, its turnover reached nearly $ 25 billion , broken down as follows:
Electric motor vehicles (81.2%);
Services (9.1%): includes maintenance and repair services. In addition, Tesla is engaged in the sale of components for electric vehicles;
Energy production and storage systems (6.2%);
Car rental (3.5%)
At the end of 2019, the company had several production plants located in the United States, but also in China with the famous Gigafactory, and in Germany.
From a geographic point of view, the United States represents 51.5% of sales, China 12.1%, the Netherlands 6.5%, Norway 4.9% and other countries 25%.
Should I buy Tesla Shares?
Wondering if now is the right time to invest in Tesla? Why should you buy Tesla shares? Here are some of the factors that indicate Tesla could be a good investment in 2020 .
The latest financial results have been very strong
In the third quarter of 2020, Tesla once again exceeded expectations. At the same time last year, the company posted a net loss of $ 907 million for the first 9 months of 2019; this year, it posted a profit of $ 566 million. Third-quarter revenue also hit a record high for Tesla, which was hardly surprising given the record delivery numbers. But what is more impressive is perhaps what allowed the company to more than double its operating cash flow from the previous quarter, thanks to higher margins and higher revenues.. As Tesla grows rapidly to keep up with the success of its vehicles, a 217% increase in its year-over-year operating cash flow is a stark demonstration that the company may face additional growth costs. This is significant, as Tesla anticipates spending up to $ 12 billion over the next 2 years to expand its factories and boost production capacity. With $ 8.4 billion in working capital and increasing cash flow, the company appears to be able to meet that $ 12 billion goal without straining its finances.
The price of Tesla cars will drop
Tesla drastically lowered the price on the Model S in early October 2020. Following two price cuts in seven days, the company cut the cost of the luxury model by almost 7.5%, from $ 74,990 to 69,420. $. Several analysts believe this price drop is related to competition, as Musk announced the price drop soon after competitor Lucid Motors announced that its next base model would sell for $ 77,400, or $ 69,900 after. a US federal tax credit. The Lucid Air vehicle is expected to boast an expected maximum range of 517 miles per charge, while the Tesla Model S has an EPA estimated range of 402. If true, barring a new innovation, a drop of price helps model S to remain competitive, as competition intensifies in the electric vehicle market, with conventional manufacturers offering more and more gasoline-electric hybrid options and several start-ups developing their high-end electric sedans, trucks and even motorcycles.
Tesla is the undisputed leader in autonomous driving
Another reason Tesla is such a great stock to buy is that it just launched a new, fully autonomous driving mode. While this feature is still in beta testing, the videos demonstrating the autopilot capabilities look futuristic. Almost immediately after the launch of this feature, the US Highway Safety Administration reminded drivers that 'no vehicle available for purchase today is capable of driving itself'. Nonetheless, these new advancements once again prove Tesla's technological lead in this forward-looking technology, which will potentially affect tens of millions of people in the near future.
A recent inclusion in the S&P 500
In at least November 2020, the announcement of the inclusion of Tesla in the S&P 500 index, largely excited investors . The reason is simple: Many funds that track the S&P 500 will have to buy the shares of the electric car maker. Investors are likely speculating that demand for shares in the coming months will exceed supply as funds sell shares of other companies to buy shares of Tesla.
Tesla Ratings, Forecasts and Estimates
According to the data we have at our disposal, the average Tesla share price target at the end of December 2020 is close to $ 600 (An estimated 50% increase from the current price of $ 400 at the time of the elaboration of this article).
The stock is currently trading on a basis of more than 100 times its adjusted results for 2021, which is quite high but financial analysts justify this high valuation by the expected growth in the activity of the company. The investment bank Canaccord has also just raised its price target on the title.
In this fall 2020, the Tesla share is scrutinized by many investors, while the company is finally showing signs of profitability, after the disappointments of recent years.
Indeed, Tesla has long disappointed stock market investors due to strong uncertainty about its ability to generate recurring profits, but the company now seems to be on the path to sustainable profitability and better visibility. In its sector of activity, it enjoys significant competitive advantages over other car manufacturers such as General Motors, Toyota and Renault .
For proof, just take a look at the graph below comparing the evolution of the Tesla share (in blue) to that of the American automotive giant General Motors (in red) over the past two years, which illustrates the enthusiasm of investors for TSLA.
TESLA vs General Motors share price
2 year chart - Source: TradingView
Conclusion: Is Now the Right Time to Buy Tesla Stock (TSLA)?
While many American companies saw their results decline during the first quarter of 2020 in the face of the Covid-19 pandemic, on the contrary Tesla did not suffer too much from this difficult context.
The outlook for Tesla therefore remains positive, which could make it a stock worth holding in the portfolio for 2020.
If you are planning to buy TSLA shares, it is best to turn to an online broker like eToro which allows you to buy Tesla shares without having to pay commissions both on the purchase and on the purchase. sale.
frequently asked Questions
Disclaimer: Every trading operation has a risk. We cannot offer any guarantee of profit. All content on our website is for informational purposes only and does not constitute a recommendation to buy or sell. This applies to assets as well as products, services and other investments. The opinions communicated on this page do not constitute investment advice and independent financial advice should be sought where possible.