How to Invest in Tesla in the UK
Trading is risky and you might lose part, or all, of your capital invested. The information provided is for informational and educational purposes only and does not represent any type of financial advice and/or investment recommendation.
This article aims to give a basic outline of who Tesla is as a company and the options open to UK investors who are interested in exploring which routes are available to them to buy shares, or partial shares, in the electric vehicle (EV) company.
The Best Brokers for Investing in Tesla in the UK
1. Plus500
Plus500 is a retail CFD (Contract for Difference) trading platform. This means you can speculate on the price movements of various assets, including stocks like Tesla, without actually owning the underlying asset. Instead, you enter into a contract with Plus500 that agrees to pay you the difference between the opening and closing price of the asset.
Here are some key points to consider:
Leverage: Plus500 offers leverage, which can amplify your profits but also magnify your losses.
Spreads: Plus500 charges spreads, which is the difference between the buy and sell price of the asset. Wider spreads can eat into your profits.
Margin: You'll need to deposit a margin, which is a percentage of the total value of your trade, to open a position.
Fees: Plus500 charges various fees, including overnight financing fees and inactivity fees.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
2. eToro
eToro is a well-known social trading platform that has gained popularity for its innovative features and user-friendly interface.
One of its key advantages is commission-free trading, allowing investors to buy and sell stocks, including Tesla, without paying any trading fees.
In addition to traditional investing, eToro also offers a unique feature called CopyTrading. This feature allows users to automatically copy the trades of successful traders on the platform, making it suitable for those who prefer a hands-off approach or want to learn from experienced investors.
eToro also provides a social feed where users can interact, share insights, and discuss trading strategies.
74% of retail investor accounts lose money when trading CFDs with this provider. Don’t invest in unless you’re prepared to lose all the money you invest.
3. IG
IG is a widely recognized online broker in the UK that offers a broad range of financial instruments, including stocks, indices, commodities and more.
They provide access to international markets, including the US market where Tesla is listed. IG offers both spread betting and CFD (Contract for Difference) trading, allowing investors to speculate on price movements without owning the underlying asset.
They provide a user-friendly trading platform with advanced charting tools, market analysis, and research resources. IG also offers competitive pricing, transparent fee structures, and a variety of order types to suit different trading strategies.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
4. Interactive Brokers
Interactive Brokers is a global brokerage firm known for its extensive range of investment options and access to international markets.
They offer a wide variety of financial instruments, including stocks, options, futures, forex, and more. Interactive Brokers provides direct market access to multiple exchanges, allowing investors to trade on major global markets, including the US market where Tesla is listed.
They are often favored by active traders due to their competitive pricing and advanced trading tools, such as customizable trading platforms, real-time market data, and sophisticated order types.
Interactive Brokers also provides research resources, educational materials, and a robust API for algorithmic trading.
What Is Tesla?
Tesla is an American company with a focus on clean energy and sustainable systems. It designs, develops and manufactures electric vehicles (cars and trucks) for sale and lease, as well as battery energy storage, solar panels and solar roof tiles.
The company was founded in San Carlos, California in 2003 and is currently headquartered in Austin, Texas. Tesla currently ranks as the world’s most valuable automotive maker and, as of June 2023, has a market cap of $784 Billion.
Like its CEO, Twitter owner Elon Musk, the name Tesla is fast becoming synonymous with fame and wealth across the globe and it stands as the world’s 7th most valuable company in the world.
Why Invest in Tesla UK? Is Tesla a Good Investment?
Right now, Tesla stock is on track to achieve its longest winning streak on record, with shares climbing for their 12th consecutive day. This is a dramatic comeback from where they stood at the beginning of the year.
Tesla’s CEO Elon Musk is no stranger to controversy and his appointment has been a divisive topic amongst the investment community. Despite this, the company has continued to sustain revenue growth.
You should perform some market analysis to decide whether investing in Tesla is a good idea for you. If you are totally new to investing, you may benefit from speaking to an expert or financial advisor.
Can You Invest in Tesla Shares in the UK?
Investors in the UK are able to invest in Tesla shares. However, the process is not straightforward and requires a brokerage account that allows you to access the US Stock Market.
It would be significantly less difficult for UK-based investors to invest in shares from a UK company than Tesla. This is because Tesla shares are listed on the Nasdaq exchange and not the London Stock Exchange.
Due to the time difference between the US and the UK, investors should know that Nasdaq trading hours are 2:30 pm until 9 pm Monday to Friday GMT.
Ideally, you should always select a trading account that comes with low fees and is safe and reputable. There are multiple brokers available in the UK, such as eToro and Freetrade that can help you get access to a share in Tesla.
Benefits and Risks of Investing in Tesla
The first half of 2023 has been a good year for Tesla, despite fierce competition within the vehicle production industry. They are also striving for progress and innovation within clean energy and the EV sphere – some investors will enjoy being part of this journey.
Tesla stock is up 51% so far this year. After a rocky patch in 2022, the company’s decisions to continue to roll out their electric vehicles and reduce prices seems to be showing the desired results, with a record 422,875 vehicles delivered during the first quarter of 2023.
Analysts have also predicted the company’s top-line growth to speed up in 2024.
The company are ambitious and keen to grow and accelerate that growth, working towards a long-term target of producing 20 million vehicles per year. Some investors will be attracted to Elon Musk’s determination and radical approach and view him as a charismatic leader and innovator.
Tesla appears to have shown resilience and ramped up production efforts, despite failing to meet their targets last year and facing the same difficult economic circumstances being felt around the globe. They seem to be seeking solutions rather than focusing on problems.
Stock price has also dropped around 50% between April last year and April 2023, meaning in relative terms, it was cheaper than it was a year ago, though this has not remained constant and it is predicted to go up during this financial year.
Risks and Drawbacks to Investing in Tesla UK
If you are toying with the idea of investing in Tesla, here are a few points to keep in mind:
No dividends – If you are considering an investment in Tesla, you should keep in mind that the company does not pay shareholders' dividends.
Risk of financial loss – When you invest in shares of any company, your capital is always at risk. The market can be volatile and your shares can go up and down in value.
Output – Tesla failed to meet their long-term growth target last year, delivering fewer electric vehicles than predicted. Their vehicles are widely considered to still be largely unobtainable to a wider audience due to their expensive price.
Controversy – How attractive Tesla is as an investment opportunity might be reflected by CEO Elon Musk’s contentious actions or the provocative opinions that the Twitter owner has demonstrated he is not afraid to put out into the public sphere. Aligning oneself financially with a company that has such as contentious figure at the helm may possess its own unique drawbacks and risks.
Competition – Currently, the vehicle industry is highly competitive with big names such as Toyota and Volkswagen dominating the industry for many years.
How to Invest in Tesla UK
You will not find Tesla’s shares listed on the London Stock Exchange, only on the Nasdaq Exchange in America. This means that if you want to invest in Tesla stock, you require a brokerage account that permits you access to the US stock market.
Useful platforms that can help UK investors access the opportunity to buy Tesla shares include eToro, Hargreaves Lansdown and Freetrade.
Once you have selected a broker, you will need to open an account. This will mean verifying your identity, so make sure you have all of the relevant documents to hand, such as your NI number.
You will be asked to complete a W-8BEN form. As a UK investor in a US company, you have to provide this form for the IRS. This will mean that you owe no income tax to the US government if your shares give you a profit.
Decide how you want to invest. For example, a Stocks and Shares ISA is a popular choice if you want to avoid paying any Capital Gains Tax (CGT), but it has an ISA allowance of (currently) £20,000 for the tax year. If you prefer to invest without any of these restrictions, then a General Investment Account (GIA) may be for you, but this comes with tax implications.
Deposit funds to your trading account. You can usually do this using a credit or debit card or via a bank transfer.
Enter Tesla’s unique ticker number (TSLA) and select the number of shares you want to buy.
When selecting your broker and making your investments, you should keep in mind the following:
Any costs or commission fees associated with the account or if there are minimum deposit requirements
If the platform will penalise you for inactivity or charge you regular amounts for maintenance.
You need to monitor your investments. This includes checking for price changes and deciding when the right time is to trade or sell in order to maximise your profits.
What are your responsibilities in terms of paying taxes – to avoid unexpected tax bills or fines, you might want to speak to an Independent Financial Advisor or your accountant.
If you do not want to commit to buying a full share (or lack the available funds), you can look into fractional share providers - eToro or Moneybox are popular platforms for this purpose.
If you want more trading flexibility or to have a range of investment choices available to you, an Exchange Traded Fund (ETF) or Mutual Fund might be an option to explore. These are popular with beginners. They hold multiple assets and are helpful to investors who want to diversify their portfolios.
It is also a possibility for UK investors to buy shares in Tesla through a CFD. Unlike the other options, this does not give you the option actually to own a share yourself, rather, you have the option to bet on whether your asset is going to increase or decrease in value.
Keep in mind that when you invest in stocks, they can go down as well as up and there is no guarantee that you are going to get rich quickly or at all. You make a profit, but you can also lose money on your investments.
Prices on the stock market are subject to change and can be volatile – it is not a place for the risk-averse to flourish. Even with the most thorough research, you cannot always rely on previous performance as a reliable indicator of future performance when it comes to an investment.
Frequently Asked Questions
How to invest in Tesla stock?
If you want to buy shares in Tesla, you need a brokerage account that gives you access to the Nasdaq market, such as eToro. You need to open an account, deposit funds, decide how you want to invest, search for Tesla (TSLA) and make your investment.
How much do you need to invest in Tesla?
If you are a total rookie investor, you can purchase a single share in Tesla to essentially test the water and see how it goes. You can also consider buying a fractional share, mutual fund or ETF. A single share is currently trading around the $250 mark.
Is Tesla a good investment?
Tesla is predicted to continue on its growth trajectory over the next few years with increased profitability as it rides out the financial crisis and reduces production costs per unit. That said, despite its recent confirmed uptrend, its status is subject to change and buying now may not necessarily be the best option for you.
Should I invest in Tesla?
Your goals and personal financial circumstances are the best indicators of whether you are ready to make an investment in Tesla or any company.
Is it too late to invest in Tesla?
Tesla shares are currently on the up, with their recent record of rising for 12 days in a row – it is not too late to invest in Tesla, but you should exercise caution around investments and only buy if it is right for you.
When is a good time to invest in Tesla stock?
In April 2023, Tesla stock was 51% cheaper than it was a year ago. If you are considering investing in Tesla, you should study the stock market and current trends and seek independent advice if you are unsure so you can make a smart investment and maximise your profits.
If you have the means and are serious about making an investment, you need to research the current market and status of Tesla stock and reach your own decision based on your findings.
What are the best online platforms for a beginner to invest in Tesla stock?
Popular platforms that allow UK investors to buy Tesla stock include eToro, IG or Interactive Brokers.
How much would 5,000 invested in Tesla stock 10 years ago be worth now?
If you had put £5k into Tesla stock 10 years ago, you could have around £1m now.
What are the main reasons to invest/not invest in Tesla?
Tesla is a famous multinational company whose market value has soared over the previous decade, hitting 1 trillion at one point.
However, Tesla stock is amongst the most overbought in the market. Investors might expect to play a long game to make money from Tesla shares bought in 2023 – the investment might be right for you, but there won’t be any immediate gratification.
Why is Warren Buffett not investing in Tesla?
Warren Buffet has chosen to avoid investing in Tesla, citing his dislike for ‘huge capital costs and huge risks.’ He also said that he feels the whole automotive industry is just too tough.
Does Tesla stock pay dividends?
No, Tesla does not currently pay dividends to shareholders.
Are there any risks in investing in Tesla?
Investing money in stock always comes with risks attached. Markets are volatile and unpredictable. There is no guarantee you will get a return on your investment and share prices can go down as well as up.
Final Thoughts
Tesla is a widely recognised and extremely lucrative multinational company that appears to be learning from some of its past mistakes and expediting its own growth through 2023.
If you have the available finances and are interested in owning shares in a green energy and electric vehicle company, buying shares in Tesla now, before they go further up in price, might be the right decision for you.
Tesla is often cited as a long-term growth opportunity for investors. Ultimately, whether or not the company presents a suitable investment opportunity for you depends on your own personal goals and circumstances.
Always seek independent, expert financial advice before making an investment if you are unsure. Never invest more than you are realistically able to lose.