Tesla is an electric and clean-energy vehicle manufacturing company headquartered in Texas in the United States. At present, it leads the global auto industry in terms of market cap, with a whopping valuation of around $777 billion, which is more than three times the market cap of the second biggest automaker, Toyota. Tesla has sold a total of around 4.5 million electric vehicles so far.
Tesla is named after the prodigious inventor Nikola Tesla, and was founded by Marc Tarpenning and Martin Eberhard in 2003. Later in 2004, Elon Musk acquired a large stake in the company for $6.5 million. The company’s first car, the Roadster, was launched in 2009.Apart from EVs (electric vehicles), Tesla also manufactures batteries, solar roof tiles, solar panels, etc. Its subsidiary Tesla Energy is the largest developer and installer of photovoltaic systems in the US.
Given India’s high import duties on cars, owning a Tesla might currently be too expensive for most Indians, but you can definitely own a piece of the company to capture a tidy yield on your investment. Let’s carry out a strategic analysis of Tesla to get a clearer picture of its investment potential.
How much is Tesla worth?
Let’s start by taking a look at Tesla’s financials.
(Amounts in billions of USD)
| Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 | |
| Revenue | $24.9 | $23.3 | $24.3 | $21.4 | $16.9 | $18.7 |
| YoY quarterly revenue growth | 47.2% | 24.38% | 37.24% | 55.95% | 41.61% | 80.54% |
| Operating margin | 13.46% | 14.78% | 16.76% | 16.52% | 15.91% | 15.33% |
| Net margin | 13.01% | 13.70% | 15.45% | 14.95% | 14.17% | 13.51% |
Thus, over the past year, Tesla has maintained a consistent net margin of between 13% and 16%. Its YoY quarterly revenue growth numbers are also quite good..
Where does Tesla’s revenues come from?
Tesla earns revenue through several segments, of which automotive sales and services are the biggest. Look at the table below to get a better understanding of Tesla’s revenue breakdown.
| Business Segment | Revenue Contribution in dollars (2022) | Revenue Contribution in % |
| Automotive Sales | $67.21B | 83% |
| Services | $6B | 7% |
| Energy generation and storage | $3.9B | 5% |
| Leasing | $2.47B | 3% |
| Regulatory Credits | $1.77B | 2% |
Stock performance of Tesla
Tesla has performed remarkably well in recent years, with its share price jumping up by more than 700% in 2020! Before investing, it is always a good idea to analyse a company’s past market performance to gauge how the market perceives the stock. Let’s take a look at Tesla’s stock performance over the last few years.
| Year | Average Share Price | Year High | Year Low | Yearly Change |
| 2023 | $205.4 | $293.3 | $108.1 | 98.90% |
| 2022 | $263.1 | $400.0 | $109.1 | -65.03% |
| 2021 | $260.0 | $410.0 | $187.7 | 49.76% |
| 2020 | $96.7 | $235.2 | $24.1 | 743.44% |
With a growth of nearly 100% so far this year, Tesla certainly looks like a great stock to invest in.
Who has stakes in Tesla?
Elon Musk currently owns a 12.95% stake in Tesla.
Apart from Elon Musk, the following institutional investors also hold significant stakes in Tesla.
- Vanguard Group, Inc. (The)
- Blackrock Inc.
- Capital World Investors
- State Street Corporation
- Geode Capital Management, LLC
The bottom line
The era of the electric vehicle has just dawned. There’s little doubt that clean energy will be the next normal in the future for the automobile industry. Tesla is a clear market leader all set to expand its production capacity even further. Tesla has already raced far ahead of its competitors in sales, and looking at its progress records, the stock is only set to soar. A relatively young company snapping at the heels of the elite trillion-dollar club of tech giants like Alphabet, Apple, Facebook, and Amazon with strong fundamentals and immense growth potential, Tesla stock is a lucrative buy.
Yes, there has been some concern that the stock may be overvalued. Yes, the stock does come with some short to medium-term volatility. However, this is not new for Tesla. It has repeatedly happened in the past. And the stock has outperformed again and again. Given the volatility though, investors must note that getting the investment timing right is important.
To invest in Tesla, Appreciate can help you with various investment options including tech ETFs, fractional investing, and more. Its lower charges and no minimum requirements are the added benefits to make your investment portfolio diverse and global. Get in touch with us to learn more and start investing!
