Investing in Tesla Stock (TSLA)

Tesla Inc. (TSLA), the world's largest automaker by market value, designs, builds, and markets fully electric vehicles (EV) and energy generation and storage systems. The company also provides services through vehicle service centers, body shops, and charging stations. Tesla makes and sells mid-size sedans, full-size sedans, and compact and mid-size sports utility vehicles.

Tesla was founded in 2003 as Tesla Motors by Martin Eberhard and Marc Tarpenning. Elon Musk invested in the company and became its chair the next year. An out-of-court settlement of Eberhard's lawsuit against Musk after Eberhard's ouster as CEO allowed both men to call themselves co-founders, along with Tarpenning and early hires Ian Wright and J.B. Straubel. The company was founded as a maker of electric vehicles and related components and has subsequently expanded into energy generation and energy storage products. Tesla went public in an initial public offering (IPO) on June 29, 2010.

In 2021, Tesla moved its headquarters to Austin, Texas, from its longtime home in Palo Alto, Calif. Musk is Tesla's chief executive officer. Tesla's stock is grouped with the consumer discretionary sector for investing purposes. Tesla's main rivals include established automakers such as Ford Motor Co. (F) and General Motors Co. (GM), as well as newer, fast-growing electric vehicle makers like Lucid Group Inc. (LCID) and China-based NIO Inc. (NIO). In FY 2021, ended Dec. 31, 2021, Tesla posted net income of $5.6 billion on revenue of $53.8 billion.

Key Takeaways

Tesla designs, builds, and sells electric vehicles, as well as energy generation and storage systems.
Tesla's rivals include major automakers such as Ford Motor Co. (F) and General Motors Co. (GM), as well as rising electric vehicle makers like NIO Inc. (NIO).
In FY 2021, ended Dec. 31, 2021, Tesla posted net income of $5.6 billion on revenue of $53.8 billion.

Tesla's Recent Developments

As of Nov. 22, 2022, Elon Musk's net worth had fallen by $100 billion in 2022.
On Oct. 19, 2022, Tesla announced its Q3 2022 earnings. While EPS and car deliveries beat analysts' expectations, revenue failed to do so and Tesla's stock declined after the announcement.
On August 5, 2022, Tesla announced a 3-for-1 stock split, and began trading on a split-adjusted basis on August 25.

What's Happening With Tesla's Recalls?

Tesla has issued multiple vehicle recalls in recent months. On April 12, 2022 the company announced a recall of 594,894 vehicles, including models Y, X, and S made in 2020-2022 and Model 3's from 2017-2022, to disable the Boombox function when the car is not parked lest it drown out pedestrian warning signals. On Feb. 1, 2022, Tesla announced a recall of 817,143 vehicles, including 2021-2022 Model S and Model X, 2017-2022 Model 3, and 2020-2022 Model Y, because the audio reminder to buckle seat belts may not work as required.

What's Happening With Tesla's Cybertruck?

On Aug. 7, 2021, Tesla announced that its electric pickup truck, the Cybertruck, will not be released until 2022, after initially being scheduled to come out in late 2021. The truck has been hampered by design issues, and also by supply chain challenges related to the pandemic. On April 7, 2022, Musk said the Cybertruck would debut in 2023, and would be assembled at the company's recently opened plant in Austin, Texas.

What's Happening With Tesla and Bitcoin?

On May 12, 2021, Musk announced on Twitter that Tesla would stop accepting Bitcoin payments for its vehicles, citing concerns over "rapidly increasing use of fossil fuels" for Bitcoin mining and transactions. On June 13, 2021, Musk tweeted that Tesla would again accept Bitcoin when approximately 50% of its mining is done with clean energy. On July 21, 2021, Musk gave more detail at a conference regarding when Tesla will accept Bitcoin. The CEO said the company would "most likely" resume accepting Bitcoin, pending due diligence to confirm that the percentage of renewable energy used to make Bitcoins is "at or above 50%," and on an upward trend.

What's Happening With Tesla's Car Radar?

In May 2021, Tesla announced that it would no longer include radar sensors on its Model 3 and Model Y cars manufactured for sale in North America. The decision caused Consumer Reports to pull its “Top Safety Pick+” designation from the Model 3, and the National Highway Traffic Safety Administration (NHTSA) said that the radar-less vehicles will no longer get a check mark for a number of categories, including dynamic brake support. Consumer Reports and the Insurance Institute for Highway Safety (IIHS) restored their highest safety endorsements for Tesla Model 3s on June 29.

What's Happening With Elon Musk and the SEC?

In September 2018, Tesla and CEO Musk settled a civil securities fraud suit brought by the U.S. Securities and Exchange Commission (SEC). As part of the settlement, Musk stepped down as chair of the board and the company agreed to corporate governance reforms, other changes, and a total of $40 million in fines for Musk and the company. The SEC had alleged that a Twitter post by Musk outlining plans to take Tesla private "lacked an adequate basis in fact." The SEC also charged Tesla with "failing to have required disclosure controls and procedures relating to Musk’s tweets."

On June 1, 2021, The Wall Street Journal reported that Musk had twice violated a court order requiring that all his tweets be pre-approved by Tesla lawyers. On March 8, 2022, Musk sued to end the SEC settlement condition requiring company lawyers to approve his tweets containing material business information, alleging it infringes his freedom of expression. On April 14, 2022, Musk called SEC regulators "bastards" for bringing the charges settled in 2018.

What's Happening With the Tesla Shareholder Lawsuit About Solar City?

On July 12–13, 2021, Musk testified in a lawsuit brought by Tesla shareholders. The plaintiffs alleged that he used Tesla's 2016 acquisition of SolarCity to bail out SolarCity while chairing both companies’ boards. Closing arguments in the case took place in January 2022, with lawyers for the plaintiffs arguing Musk should return the Tesla shares he received for his SolarCity stock, valued as of January 2022 at $13 billion. A ruling in the case remained pending as of April 21, 2022.

FAQs

Has TSLA ever split its stock?

Tesla has split its stock twice. Effective Aug. 31, 2020 it executed a 5-for-1 split of common shares. It executed a 3-for-1 split of common shares effective on August 25, 2022.

Does TSLA pay a dividend?

No, it does not pay a dividend.

How many shares of TSLA stock are there?

Tesla had approximately 3.16 billion shares outstanding as of Oct. 18, 2022.

Who Is Tesla's CEO?

Tesla's CEO is Elon Musk. Musk made a significant early investment in the company the year after it was founded. Under his leadership, the company has grown from a money-losing startup into a profitable, large automaker and a global leader in electric vehicles. He was chair of the company's board until resigning as part of a settlement with the SEC in 2018. Musk became CEO in October 2008.

What Positions Does Elon Musk Hold at Tesla?

In addition to the title of chief executive officer, Elon Musk was given the title of "Technoking of Tesla" in 2021.

Who Are Tesla's Top Shareholders?

As of Dec. 15, 2020, Tesla's top individual insider shareholders are Kimbal Musk, Zachary Kirkhorn, and Jerome M. Guillen, and its top institutional shareholders are Elon Musk, Susquehanna Securities, and Capital World Investors.