One of the hottest, most traded stocks in 2020, Tesla’s share price only knows one way — upwards. Here’s what you need to know about the world’s most well-known electric vehicle maker.
Tesla is a company that builds all-electric vehicles, clean energy generation and storage products. There are currently four different Tesla models drivers can choose from — Model S, Model 3, Model X and Model Y. In 2020, Tesla delivered nearly 500,000 vehicles, a 36per cent increase from 2019.
A company that is at the forefront of the electric vehicles industry, Tesla has become one of the most talked about stocks on the US stock market because of its tremendous growth. But before you hop onto the Tesla bandwagon, here are 10 things you need to know about Tesla.
1. Tesla bought $1.5 billion (S$2 billion) worth of bitcoin
The hottest news surrounding Tesla is its purchase of $1.5 billion worth of bitcoin.
Tesla said that their bitcoin purchase is for “more flexibility to further diversify and maximise returns on our cash.”
Bitcoin as a payment method for Tesla products is also imminent. The company said it would start accepting bitcoin as a payment method for its products, initially on a limited basis and subject to the applicable laws.
2. You can now buy a Tesla Model 3 in Singapore
Tesla fans, rejoice. Tesla cars are finally available for purchase in Singapore.
If you have a need for speed, the Tesla Model 3 Performance (a high-powered version of Model 3) reaches 100kmh in 3.3 seconds and will retail at just under $155,000. Both of these prices are excluding COE.
For comparison, based on the current COE prices, the Tesla Model 3 Standard Range is cheaper than a petrol-driven Toyota Camry.
You’re also encouraged to reduce your emissions and drive an electric vehicle in Singapore, with electric car incentives and more EV charging points being rolled out by the government.
3. Elon Musk is the world’s richest man (and an influential one at that)
Elon Musk, the co-founder and CEO of Tesla, is the richest person in the world, piping Amazon’s Jeff Bezos.
Besides being the richest person in the world, Elon Musk’s social media activities also hold incredible weight, having the ability to impact the markets.
For example, his Tweet recommending people to use Signal caused a surge of more than 5,000per cent in the stock price of Signal Advance, an completely different company from Signal — the encrypted-messaging platform.
More recently, Elon Musk’s tweets sent Dogecoin — a Shiba Inu meme-inspired cryptocurrency that started as a joke — prices shooting through the roof.
4. Tesla is a part of the S&P 500
Tesla joined the S&P 500 — an index that tracks the 500 largest companies listed on the US markets — on 21 December 2020. This means that if you’re invested in the S&P 500, you would also have exposure to Tesla shares.
The S&P 500 is weighted by market capitalisation. Upon joining the index, Tesla will be amongst the top 10 most valuable companies in the index, alongside the likes of Amazon, Alphabet, Apple, Microsoft and Facebook.
5. Elon Musk is a supporter of bitcoin
Besides tweeting about Dogecoin, Elon Musk has also made his fancy for cryptocurrency known.
On Jan 29, 2021, the Tesla CEO added the hashtag #bitcoin to his Twitter bio. Days after, he shared on the popular Clubhouse audio chat app that at this point, he thinks bitcoin is a good thing and that he is a supporter of bitcoin.
With Tesla having purchased bitcoin, investors of Tesla (and even the S&P 500) will likewise get some exposure to the cryptocurrency, whether you like it or not.
6. Gone up 900 per cent since the start of 2020
The meteoric, Reddit-backed rise of GameStop’s share price remains heavily etched in investors’ minds especially as prices continue to come crashing down.
Unlike the extremely short surge in price these meme stonks have seen, Tesla’ share price has been rapidly rising even before the Covid-19 pandemic.
Tesla closed at USD$849.46 on 9 February 2021. Over a year ago on 2 January 2020, Tesla opened at USD$84.90 — that’s a phenomenal 900per cent rise.
7. Tesla is significantly overvalued
If you’re an investor that hunts based on valuation, Tesla is not your stock.
The internet is hardly short of articles stating that Tesla shares are massively overvalued. Elon Musk himself admitted mid-last year that Tesla shares were “too high”. However, he also shared that he thinks Tesla shares will be worth more in five years.
Some analysts price Tesla’s at lows of USD$67, with a high estimate of USD$1,200 — showing just how far the ends of Tesla’s price spectrum can be. This article gives a good breakdown and comparison of Tesla’s valuation.
8. Tesla has had five consecutive months of profits
Investors bullish on Tesla will know that in October 2020, Tesla recorded its fifth consecutive quarterly profit on record revenue of USD$8.8 billion. This was boosted by an uptick in vehicle deliveries and sales of environmental regulatory credits to other automakers.
In Q3 2020, Tesla produced just over 145,000 vehicles and delivered nearly 140,000 vehicles. In comparison, for the same period of Q3 2020, Ford delivered 551,796 vehicles in the US while General Motors delivered 665,192 vehicles.
9. Tesla is hardly the only player in the electric vehicle industry
Besides Tesla, if you’re looking to tap on the growth of the electric vehicle industry, or if you’d like to diversify your holdings beyond Tesla, you can also consider Tesla’s competitors, all of which are trading at a far lower price.
Competitors include Nio, BYD Company, Li Auto, Nikola and Workhorse Group. It also includes traditional car makers such as Nissan, Hyundai, Audi, Ford, BMW, Kia Volvo and more.
As Tesla continues to chip away at the market share of automobile makers, traditional car companies aren’t just resting on their laurels. Instead, these companies are also increasing their offerings of electric vehicles, or hybrid petrol-electric cars.
Examples include the Nissan leaf, Kia Niro EV, Volkswagen E-golf and Chevy Volt.
Investing in Tesla, from Singapore
A highly polarising stock, Tesla has its hardcore fans and investors, as well as critics who poke fun at its valuations.
If you’re bullish on the growth of Tesla, you can consider purchasing Tesla shares directly, investing in electric vehicle ETFs or an ETF that tracks the S&P 500. To do so, start by using an online brokerage account that offers competitive fees and attractive sign-up perks.
This article was first published in SingSaver.com.sg.