How To Invest In Tesla – Investing in Tesla For Beginners 2021

Fact Checked by Gary McFarlane

One company that has been constantly making headlines over the past few years is Elon Musk’s Tesla. Any early Tesla investors have been rewarded highly, with the share price increasing by over 1500% in just the past 5 years. With the rate at which the electric vehicle market is growing, it’s logical that Tesla’s share price is still far from the top, this has led to a large number of investors wanting to get involved before the price becomes overly prohibitive. Throughout this guide, we’ll discuss how you can invest in Tesla, the best Tesla investment broker, and provide you with a detailed guide on how you can start investing with our top platform, eToro.

#1 Broker to Invest in Tesla– eToro

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How to Invest in Tesla – Step by Step Guide 2021

If you’re looking for a quick guide on how to invest in Tesla, you’re in the right place. We’ve included this short step-by-step so you can start investing in just a few minutes. If you’re looking for a more comprehensive guide you can find one toward the bottom of the page.

  • Step 1: Open an eToro account: The first thing you’ll have to do is register with a broker. We recommend eToro. Simply type “eToro.com” into your browser, click on “Join Now” and fill in the required details.
  • Step 2: Verify your Identity: Because eToro is a regulated platform, you’ll need to verify your identity. All you’ll need for this is a photo ID (passport, driving licence) and proof of address (bank statement, utility bill).
  • Step 3: Fund your account: After your eToro account has been verified you’ll need to deposit funds. To ensure you won’t have any difficulty with this eToro supports credit/debit card, bank transfer, and e-wallet (PayPal, Skrill, etc).
  • Step 4: Invest in Tesla: You’re ready to invest in Tesla! Just type “Tesla” into the eToro search bar, press “Trade”, enter however much you’d like to invest, and press “Trade”. 

 

Where to Invest in Tesla – Choose a Broker

Before you can start investing in Tesla, you’ll need to choose a trusted brokerage. This is one of the most important steps when investing, if you don’t do your homework you could end up on a platform with high fees or limited options.

1. eToro – Best Overall Tesla Broker

eToro is one of the largest brokerages in the world, they currently look after over 20 million customers and have been operating since 2007. They offer customers an extremely simple, yet powerful investment platform, this is achieved by implementing features relevant to beginner, intermediate, and experienced investors. 

Security & Privacy

You don’t get to be one of the world’s largest brokers without having solid security, after all, security is usually one of the first things on a potential investor’s mind. eToro is regulated by both CySEC and the FCA, meaning they’re subjected to regular audits and have to comply with strict rules surrounding the protection of customers and their data. To ensure your data doesn’t get intercepted by any bad actors, sensitive information is SSL encrypted before it makes its way to the eToro servers. Additionally, eToro users have the option of setting up 2FA on their accounts, offering an additional layer of protection should your account get compromised. 

Features

Regardless of your investment experience, eToro is full of useful features that you’ll be able to make use of. If you haven’t had much trading experience an excellent way to start off with minimal effort is using eToro’s CopyTrading, it offers users a way to automatically mirror the trades of more experienced users, enabling you to learn trading strategies while earning a passive income. Another useful feature for both beginners and experienced investors is CopyPortfolios, a way you can invest in a group of related assets at once, lowering risk and saving time. For all the technical traders out there, eToro offers comprehensive charting and enough indicators for you to get by. 

 

eToro Fees

Fee Type Fee Amount
Commission Fee 0%
Deposit Fee $0
Withdrawal Fee $5
Inactivity Fee $10 after one-year inactivity (Monthly) 

 

Pros

  • Regulated
  • CopyTrading
  • CopyPorfolios
  • 2FA
  • Over 20 million users
  • 15-year track record

Cons

  • Lacking MetaTrader support
  • Could benefit from additional indicators

67% of retail investor accounts lose money when trading CFDs with this provider.

2. Robinhood – Best Platform to Invest in Tesla for Beginners 

If you’re a US-based investor you will likely have heard the name Robinhood mentioned, they were all the rage after releasing their simple, yet effective app. Robinhood definitely played a part in making investing more accessible for the masses and was one of the first mainstream brokers to offer commission-free trading in the US. 

Security & Privacy

Robinhood has done well to ensure that their customer’s funds are well looked after, they’re regulated by the SEC, so you be sure they’re informed of any regulatory changes before they come into action. As a member of the SIPC anyone with a Robinhood account is insured up to $500,000 so investors are covered in the event of Robinhood getting compromised. To make sure hackers aren’t able to get hold of any sensitive information, accounts are encrypted and stored using industry-leading methods. Additionally, to make sure a transaction cannot be falsely confirmed, Robinhood has implemented multi-sig transactions, meaning each transaction requires authentication from multiple sources. 

Features

If you’re looking for a platform that makes investing in Tesla simple, it doesn’t get much better than Robinhood. They offer users an incredibly intuitive app making it accessible for anyone with a smartphone, however, they also offer web-trading so regardless of which device you use, Robinhood has you covered. They give users the option of investing in a few different markets, which is excellent as it allows you to have a heavily diversified portfolio on just one platform. One of the main draws of Robinhood was its commission-free fee structure, however, it should be noted this only applies to trades of under 50 shares. 

Robinhood Fees

Fee Type Amount
Commission $0 on trades of <50 shares. Up to $5.95 on trades over 50 shares 
Withdrawal Fee $0
Deposit Fee $0
Inactivity Fee $0

 

Pros

  • Intuitive
  • Supports most devices
  • Commission-free (on low volume trades)
  • Regulated

Cons

  • Limited account types
  • Lacking some types of investment
  • Not available in every country

67% of retail investor accounts lose money when trading CFDs with this provider.

3. Fidelity – Best Platform to Invest in Tesla for Experienced Traders 

Fidelity is another huge, global, name in the investment space. They’ve been around for years and serve customers on an international scale. They offer a huge range of investment products, from stocks to ETFs and retirement accounts, this means that no matter your investment goals you’ll likely have an option that works for you. Although Fidelity is aimed at everyone, those without much experience may be confused by the interface. 

Security & Privacy

As you would expect from an international brokerage, Fidelity has great security and goes the extra mile to ensure customers aren’t left out of pocket. They’re regulated by the SEC and FINRA, so you needn’t worry about your investment going missing or your data being mishandled. One fairly unique feature that Fidelity has implemented is voice biometrics, a way of confirming customers’ identity by having them speak into the phone (or any other microphone-enabled device). 

Fees & Features

Fidelity is an investment powerhouse, they allow users to access a huge range of investment products, meaning that no matter what your investment goal is you’ll have access to something that works for you. If you’ve spent much time researching ETFs there’s a high chance you would’ve come across one of Fidelity’s, many of their ETFs are traded by independent brokerages, which is always a good sign of legitimacy. One area Fidelity shines in is its focus on providing users with extensive, free, research. This enables Fidelity customers to make better-informed trades while being sure the research was conducted by experts. In general, Fidelity’s fees are some of the lowest in the industry, however, this can change dramatically if you need to use assisted trading. 

Fidelity Fees

Fee Type Fee Amount 
Commission Fee 0%
Deposit Fee $0
Withdrawal Fee $0
Inactivity Fee $0

 

Pros

  • Global investment platform
  • Huge range of investment products
  • Solid research
  • Low fees

Cons

  • Beginners may find the platform complex
  • Fees rise sharply for options/margin/assisted trading

67% of retail investor accounts lose money when trading CFDs with this provider.

  

Invest in Tesla – Broker Price Comparison

Choosing between all of the available brokerages can be difficult and time-consuming, but to make it easier for our readers, we’ve included this easy-to-reference table that compares the fees on each platform. 

Broker Commission Deposit Fee Withdrawal Fee Inactivity Fee
eToro 0% $0 $0 $10 monthly (after 12 months inactivity)
Robinhood $0 on trades of <50 shares. Up to $5.95 on trades over 50 shares  $0 $0 $0
Fidelity  0% $0 $0 $0

 

What are the Different Ways to Invest in Tesla? 

If you’re reading this guide, you’re most probably interested in learning how to invest in Tesla and whether or not it’s a solid investment. Before we delve deeper into these topics, you must understand the different ways you can invest in Tesla. Each method comes with its own advantages and disadvantages and will be best suited to different investment strategies.   

Stocks 

The most common type of investment you can make is buying a company’s stock (sometimes called a share). Stocks, as we know them today, have been around since the 1600s, and have always been a favourite for investors looking to get their hands on a piece of a company. When you invest in a stock, you’re buying a fraction of the company, technically making you a part-owner. Becoming a part-owner comes with several benefits, the first of which is dividend payments. If a company is growing and making steady profits, they’ll often use dividend payments as a way of sharing some of the profits with investors. The amount you’ll receive is directly linked to the number of shares you own and payments are typically dispersed either quarterly or annually. The second benefit you’ll receive when investing in Tesla shares is voting rights, this gives you the ability to attend shareholder meetings and vote on the future of Tesla. Once again, the number of votes you can cast is directly linked to the number of shares you own.

CFDs (Contract For Difference)

A CFD otherwise called a contract for difference is a speculative investment that works in a completely different way to stock. Instead of purchasing an asset, you’ll be speculating on if the price will rise or fall, earning the difference between your entry and exit point. Typically, to make up for the fact that you’ll be taking advantage of small changes in price, you will need to use leverage, a way of multiplying your profits. Most brokerages allow you to use up to a 5:1 leverage, however, it’s crucial you only do this if you’re an experienced trader because losses are also amplified and you have the potential to lose even more than you initially invested. 

ETFs (Exchange-Traded Fund)

Investing in an ETF, sometimes called an exchange-traded fund is an excellent way of making a long-term investment while minimising risk. An ETF bridges the gap between a CFD and stock, allowing investment into a bundle of related assets. Because a fund sets up an ETF to mirror the performance of a certain index or group of assets, it’s important to note, despite the fact you can still receive dividend payments, you’re only investing into the fund and not any of the underlying assets. Investing in an ETF is typically seen as a low-risk investment because by putting your money into multiple companies, you’re shielded from losses should one have a poor year. 

Best Ways to Invest in Tesla 

If you’re still struggling to decide which type of investment would be best for you, then you’ll be interested in this section. Before you invest in Tesla, you should consider what you’re looking for and try to weigh that against what each type of investment offers. To help make your choice easier, we’ve explored who could best benefit from each method, allowing you to match your requirements with a certain investment type. 

Invest in Tesla Stocks

Stocks are the perfect investment for anyone that believes a particular company is likely to do well & wants to open a long-term position. They give you the ability to help shape the future of Tesla by voting on various topics. The dividend payments you receive provide much-needed liquidity and provided you have a large number of shares you can end up with a solid form of passive income. The downside to investing in Tesla stocks is that should the company face issues or have a bad year, you will feel the full brunt of this impact. 

Invest in a Tesla CFD

If you’re the type of investor that prefers day-trading or making short-term investments, then you can’t get much better than a CFD. As we mentioned CFDs are speculative and not assets, this means that you’re unlikely to face any liquidity issues when getting out of your position (although the chance of a blue-chip stock facing liquidity issues is small anyway). This means that investors are able to quickly open and close positions, which is extremely important when taking advantage of small price changes. One of the biggest negatives to investing in CFDs is a greatly increased risk, even more so when using leverage. 

Invest in a Tesla ETF

Although you won’t have the same single-asset exposure as you do when investing in a stock, a Tesla ETF provides a great lower-risk alternative. This lower risk can be attributed to the fact that when investing in an ETF, you’re investing in a variety of companies (sometimes hundreds), unfortunately, this is something of a double-edged sword, as if the Tesla share price exploded, you would only enjoy a percentage of the potential returns. Despite the fact that you don’t own any underlying assets, you can still receive dividend payments from an ETF, although if you wanted to retain voting rights you’d be out of luck. 

Is Tesla a Good Investment? 

There aren’t many companies in recent history that have had as successful a decade as Tesla. In the past 5 years, their share price is up over 1500%, and with the prominence of electric vehicles steadily increasing, Tesla’s share price will likely continue following suit. There’s no point investing at the top, so to help you make a choice on if investing in Tesla is right for you, we’ve broken down some pros and cons associated with a Tesla Investment

Innovation

You would be hard-pressed to find a vehicle manufacturer that is as innovative as Tesla, especially when considering that certain companies have deals in place to hinder innovation in order to lower cost/competition. Tesla has been continuously pushing the boundaries of electric vehicle (EV) technology, if you look at the difference in specs between the original Roadster and the current generation of Tesla, this becomes clear, the speed and range they offer are way up and prices way down. If the current rate of improvement continues we could see some much more consumer-friendly models being released in the next few years. A cheaper offering would likely see Tesla take some market share away from budget EV offerings like the Nissan leaf, making it a great time to invest in Tesla. 

Electric Vehicles are the Future

It’s no secret that the days of fossil-fuel-powered vehicles are limited, fossil fuels are a finite resource and they produce far too many emissions, especially when considering the ever-increasing amount of vehicles on the roads. As they increase in efficiency and decrease in price, electric vehicles are set to become the new standard for transportation, with Tesla being the world’s largest EV manufacturer, it stands to reason that the over 1500% gain in the past 5 years is just the beginning for Tesla’s share price.  

Investing in Tesla – What are the Risks

Although Tesla has a good track record of delivering profits to investors, it doesn’t mean that they’re impervious to poor market conditions. A lot of Tesla’s success came from its first-mover advantage in the EV market, but as more companies begin releasing EVs, this is rapidly becoming less important. Along with this, Tesla’s are seen as a premium offering, and although they’re getting cheaper, the cost is still prohibitive for the average person. 

Increasing Competition 

Although Tesla had a tight hold on the electric vehicle sector, increased competition means this isn’t as true as it once was. For several years Tesla was the only company offering an electric vehicle that had both a good range and a good top speed, however, in the past couple of years we’ve seen some big names releasing their own electric cars, namely, BMW, Porsche, and Ford, amongst others. Increased competition should result in more competitive pricing/features but if Tesla chooses to stick to producing cars for their loyal customer base rather than bringing out alternative offerings they could see themselves start to lose market share. As it stands in 2021, Tesla is still by far the largest electric vehicle manufacturer but with the increasingly competitive offers from other brands, this might not be true for much longer.

Too Costly For Many

A Tesla was originally touted as a high-end electric vehicle, complete with premium features and a premium price tag. However, in an attempt to make electric vehicle ownership accessible for the masses, we’ve started to see more pocket-friendly models released. Despite Tesla’s best efforts, the $58,000 MSRP is still out of reach for many and with the increased amount of choice in the EV market, it’s no surprise consumers are picking more affordable alternatives. Outside of the purchase price, prospective Tesla owners need to be wary of extremely high repair fees, once again adding to the cost of purchasing a Tesla.  

How to Invest in Tesla with eToro

To ensure our readers have the easiest time possible when making their first investment inTesla, we’ve created this comprehensive guide that goes through every step of the investment process in detail. 

Step 1: Open an account with eToro

Before making any investment the first thing you’ll need to do is register with a reputable broker. For this, we recommend eToro because it’s simple-to-use, regulated, and has great security. Registering is easy, just type “eToro.com” into your browser, press “Join Now”, and fill in the necessary information. 

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Verify your account

eToro is a regulated platform, meaning they’re subject to regular audits and have to comply with strict rules surrounding money laundering. This means that before you can start trading, you’ll need to verify your identity. It only takes a few minutes and all you’ll need to provide is a photo ID (passport, driving licence) and proof of address (bank statement, utility bill).

Step 3: Fund your account

Once your account has been verified, you’re almost ready to invest in Tesla! All that’s left to do is fund your eToro account. Just click on the button marked “Deposit Funds”, select the payment method of choice, enter however much you plan on investing, and press “Deposit”. eToro supports credit/debit cards, bank transfers, and e-wallets (PayPal, Skrill, etc) so there should be something suitable for you.

Step 4: Invest in Tesla!

That’s all! Now you’re ready to invest in Tesla. Just type “Tesla” into the eToro search bar, select the relevant option, press trade, enter the amount you wish to invest, and press “Buy”. Your investment will be automatically credited to your eToro account, you can view and manage it from the “Portfolio” section. 

Conclusion

In the past 5 years, Tesla’s share price has shot up by more than 1500%, and considering Tesla the front-runner in a market that’s rapidly growing (electric vehicles) it makes sense investors are looking to get in on the action before prices climb too high. Now that you’ve read this guide, you should be equipped with all the knowledge you need to make a decision on how to invest in Tesla, which Tesla investment broker is right for you, and exactly how you can start investing. If you’re still undecided on which broker is right for you, we recommend eToro, their platform is simple to use, powerful, and highly accessible. There we have it, you’ve reached the end of our guide on how to invest in Tesla, we hope you found this guide useful and enjoyed reading it, happy investing! 

Best Broker to Invest in Tesla – eToro

1
$50Exclusive promotion
Our score10
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% Commissionstart TradingOur score 10

FAQs

 

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About Jay Leonard PRO INVESTOR

Jay is a UK based cryptocurrency expert, specialising in fundamental analysis and medium to long term investments. He has a great deal of hands on experience in the space and a current focus on institutional adoption.