Tesla Stock Price Guide: What Drives Tesla’s Share Price?

Since it was founded in 2003, Tesla (TSLA) has become a force in the automotive industry, pioneering electric vehicles (EVs) and clean energy solutions.

Let’s take a closer look at Tesla’s story by exploring its origins in the stock market, analysing how its share price has evolved over time, and finally, the key factors that can cause share price volatility.

TL;DR

• Tesla is a popular American electric car manufacturer.
• Tesla shares have been listed on the Nasdaq since its Initial Public Offering (IPO) in 2010, during which the company raised approximately $226 million.
• The price of Tesla stocks can be influenced by various internal and external factors that can impact its financial performance.
• Tesla’s share price can be influenced by currency swings, environmental regulations, competition, and government incentives for electric vehicles.
• Scandals about incidents with Tesla cars and car recalls, as well as major layoffs can also impact Tesla's share price.

What Is Tesla?

Tesla is a leader in electric vehicles (EVs), renowned for designing, manufacturing, and selling high-performance luxury EV models. Their vehicle lineup includes the Model S, Model 3, Model X, Model Y, and the Cybertruck.

Beyond electric cars, Tesla operates as a comprehensive clean energy company.

The company offers a range of energy generation and storage solutions, including solar panels, solar roofs, Powerwall home battery systems, and Megapack large-scale battery storage solutions. Additionally, Tesla provides various charging options for their vehicles, including home charging stations and an extensive Supercharger network.

Have Tesla Shares Ever Undergone a Stock Split?

As of April 2024, Tesla has undergone two stock splits in its history, presumably to make the shares more affordable and accessible to a wider range of investors, thereby increasing liquidity.

The first split, a 5-for-1 exchange, occurred on August 31, 2020. The second, a 3-for-1 split, took place on August 25, 2022. As a result of these splits, the effective IPO price per Tesla share has been adjusted to $1.13 as of April 2024. The value of Tesla's IPO price might change again if a new stock split were to happen.

Where Are Tesla Shares Listed?

Tesla’s shares are listed on the NASDAQ stock exchange. The company is also a component of several American indices, such as the Nasdaq 100 and the S&P 500 which are two of the most widely traded indices.

What Are Tesla’s Trading Hours?

Retail investors can typically trade Tesla stock during regular market hours*. Traders can buy and sell Tesla shares Monday through Friday between 9:30 AM and 4:00 PM Eastern Time (between 1:30 PM GMT and 8:00 PM GMT).

Just like the Nasdaq stock exchange, some brokers offer extended trading hours, allowing participation in the pre-market (from 4:00 AM to 9:30 AM ET, equivalent to 8:00 AM to 1:30 PM GMT) and the after-hours market (from 4:00 PM to 8:00 PM ET, equivalent to 8:00 PM to midnight GMT).

*CFD trading hours on Plus500 may differ.

Tesla Stock Price and Market Cap Milestones

Tesla’s stock price has been on a wild ride. Following the 2008 financial crisis , the company faced financial struggles, and its stock remained stagnant for several years. However, a turning point came in April 2013 with the first significant price surge. This bullish trend continued, and by 2020, Tesla shares had significantly outperformed other major tech and auto stocks, including giants like Amazon (AMZN) and Apple (APPL).

Between 2010 and 2020, Tesla’s 4,125% growth dwarfed the S&P 500’s performance of around 167% during the same period. This meteoric rise placed Tesla in a league of its own, as the top performer on the S&P 500 in the 2010s, with Netflix (NFLX).

The year 2020 marked another milestone as Tesla’s stock price increased nearly eightfold, soaring from around $90 to a staggering $700 per share. This run culminated in Tesla joining the prestigious $1 trillion stock club by late October 2021, with share prices exceeding $1,000 (pre-stock split).

However, this record high was followed by a period of correction. Tesla’s stock price witnessed a decline, losing roughly 76% of its value to reach a low of around $113 (adjusted for stock splits) at the beginning of 2023. As of the end of April 2024, Tesla has shown signs of recovery, with its share price climbing to around $193, reflecting a more than 74% increase from the previous low.

What Factors Have a Potential Impact on Tesla Share CFD Prices?

Because Tesla’s stock price can be influenced by a range of factors, traders should understand the different drivers of Tesla's share price when CFD stock trading is based on which a CFD trader speculates on the difference between the opening and closing price of the trade without owning the underlying asset.

Tesla’s Financial Performance

Tesla’s financial performance paints a picture of the company’s health and growth prospects. Investors can analyse this information to assess the potential future value of Tesla’s stock, ultimately potentially influencing their buying and selling decisions, which in turn can affect the share price.

Earnings, company guidance, car sales and car production are some of the most significant elements influencing Tesla’s financial performance. Therefore, the earnings season is a crucial period for getting more insights into these factors.

Strong and consistent earnings growth can be a significant positive indicator, as it demonstrates Tesla’s ability to turn a profit, which can be important for long-term sustainability. Beating analyst expectations on earnings, especially Earnings Per Share (EPS), can trigger a stock price jump, even if the news in itself isn’t that positive - and vice-versa.

Tesla’s forecasts and comments about future earnings, car deliveries, or new product launches are closely watched. Upward revisions in guidance based on positive developments can boost investor confidence and propel the stock price. Conversely, downward revisions due to unforeseen challenges can trigger a sell-off.

High sales volume can mean strong consumer demand for Tesla vehicles, which can translate to increased revenue and potential future profitability, which investors can view favourably. Conversely, disappointing sales figures can lead to a stock price slump.

Efficient and expanding production capacity to fulfil orders and capitalise on market opportunities are also important for the company and can be positive for the stock price, while delays or production issues can raise concerns and impact the stock price negatively.

Exchange Rates

Currency fluctuations can be a double-edged sword for Tesla’s stock price. A strong US Dollar can hurt exports but potentially benefit production costs in foreign countries. Conversely, a weak US Dollar can help exports, but it can also raise costs abroad. Depending on how it impacts Tesla’s overall financial performance, Tesla shares can move up or down.

Regulation & Gouvernement Incentives About EVs

Government regulations and incentives surrounding electric vehicles can significantly influence Tesla’s share price by either potentially supporting the market’s demand for Tesla cars or dampening it.

Stricter emissions regulations around the world could push consumers towards EVs as a cleaner alternative. Additionally, governments offering incentives for purchasing EVs, such as tax breaks, subsidies, or rebates, could support EV adoption and market demand. Otherwise, rollbacks or relaxed regulations could have a bearish effect.

Trends in the Electric Vehicle Industry

A booming EV market with rising sales could validate Tesla’s leadership and fuel investor confidence, potentially pushing Tesla’s share price up. However, a slower-than-expected EV shift could dampen enthusiasm, lower sales, and lead to a potential share price drop.

Competition

Increased competition can force Tesla to innovate faster, leading to better technology and offerings for consumers, which can be seen favourably by traders and potentially boost the share price. However, higher competition can also lead to price wars and a lower market share that can dampen share prices.

Car Prices

Car price hikes due to strong demand or improved features can signal high profits, which investors tend to like. Additionally, it can also bolster Tesla’s premium image.

Conversely, price cuts that aim to boost sales could be appealing to growth-focused investors over the short term if sales truly increase and turn up into higher margins. However, they could also suggest weak demand or inventory issues, and lower overall profits, potentially hurting the share price.

Ultimately, the impact of Tesla’s car price on the company’s share price mostly depends on Tesla’s pricing strategy and its potential impact on profitability, sales, and brand image, all of which can influence the share price.

Car Incidents Linked to Autopilot and Full Self-Driving Technologies & Car Recalls

Automobile incidents, alongside vehicle recalls, have the potential to influence Tesla’s stock performance, as they may prompt significant safety apprehensions and heightened regulatory scrutiny.

The extent of their impact of these incidents hinges on factors such as severity, Tesla’s responsiveness, and investor interpretation. Severe safety issues and delayed responses can result in a decrease in share value. Nevertheless, adopting a transparent and proactive stance toward managing these issues can mitigate negative repercussions.

Tesla’s Ability to Innovate

Tesla’s capacity for innovation can serve as a significant driver for its stock value, bolstering investor trust in the company’s position as a market leader and its prospects for future expansion. This innovation may encompass advancements in battery technology, charging infrastructure, autonomous driving features, and product diversity, among others.

Market Sentiment

Market sentiment and trading psychology are powerful forces that can significantly influence Tesla’s stock price. When the overall market feels optimistic about Tesla’s future, share prices can increase. Conversely, negative market sentiment can trigger a sell-off.

Tesla Stock Price Predictions

It is impossible to predict the way Tesla stock price will act in the future, but taking into account the different factors mentioned above, among others, could help traders decide whether to buy or short-sell Tesla shares.

To gauge market sentiment and get a glimpse into how professionals view a stock’s direction, traders can also check analyst ratings (buy, hold, sell) and target prices. As of April 2024, analysts leant towards a ’buy’ rating for Tesla with an average target price of $171.99.

Now that you better understand what can influence Tesla’s stock price, you might want to test your newly gained knowledge and start trading Tesla share CFDs now.

Tesla Price — Frequently Asked Questions (FAQs):

Who are Tesla’s top shareholders?

As of 2024, Tesla’s CEO Elon Musk remains the largest individual shareholder, holding roughly 23% of all Tesla shares. His brother, Kimbal Musk, also holds a stake, owning approximately 1% as of April 2023. Asset management firms hold a significant portion of Tesla’s shares, accounting for approximately 41.87% of the total outstanding shares at the end of 2023. Major players in this category include Vanguard, BlackRock (BLK), and State Street Corp.

Who are Tesla’s main competitors?

As of April 2024, Tesla’s main competitors can be found among the classic automakers that have an EV line of products, such as BMW (BMW.DE), Mercedes-Benz (MBG.DE), Ford (F), Honda (HMC), General Motors (GM), Nissan (7201. TY), Toyota (TM), and Volkswagen (VOW.DE). Tesla also has direct competition from manufacturers specialised in electric cars, such as BYD (1211. HK), Li Auto (LI), Lucid Group (LCID), Nio (NIO), Rivian (RIVN), and Xpeng (XPEV).

When was Tesla’s IPO?

Tesla decided to go public on June 29, 2010.

What was Tesla’s IPO price?

The price of Tesla shares during its IPO was $17 per TSLA share.

How many shares of Tesla are available for trading?

As of January 2024, Tesla has 3,189 million outstanding shares.

Does Tesla distribute dividends?

As of April 2024, Tesla has never declared being ready to pay dividends, as the company intends on using earnings to support its growth.

What can drive the price of Tesla shares up or down?

The price of Tesla stocks can be influenced by a multitude of factors, such as company performance, industry trends, external factors and investor sentiment among other factors.

How can I trade Tesla stock price movements?

There are various ways to trade Tesla, such as buying physical shares of Tesla, trading Exchange-Traded Funds (ETFs) that include Tesla stock, and speculating on Tesla’s share price movements over the short term through Tesla Share Contracts For Difference (CFDs).