Analyzing Tesla’s Stock: History, Performance and Future Prospects

Tesla is the most highly valued automaker in the world while being only around the 20th largest by volume. Founded in 2003 by American entrepreneurs Martin Eberhard and Marc Tarpenning and named after Serbian American inventor Nikola Tesla, Tesla, Inc. is one of the most familiar car brands in the world.

The brand was previously known as Tesla Motors. The American company manufactures electric automobiles, solar panels, and batteries for cars and home power storage. Elon Musk became the largest shareholder of the company in 2004, and since 2008, he has served as CEO.

Tesla Stock

Teslas initial public offering was on the 29th of June 2010 and raised $226 million for the company. 3,300,000 shares of common stock were issued to the public at a price of $17.00 per share.

Tesla: The early beginnings

Tesla was formed in July 2003 by engineers Martin Eberhard and Marc Tarpenning, in San Carlos, California with the aim to engineer and mass produce an electric sports car. Eberhard acted as the chief executive officer (CEO) and Tarpenning as the chief financial officer (CFO) of Tesla. PayPal cofounder Elon Musk helped finance the venture with $30 million.

The first Tesla car

On the 19th of July 2006, Tesla unveiled its first prototype, the Roadster with an expected release in 2007. The invitation-only event took place in Santa Monica, California among a crowd of 350 people. The original Tesla Roadster used a lithium-ion battery pack and featured a driving range of nearly 250 miles. George Clooney was among the first to secure one of the first units in production by paying $100,000.

In 2008, Tesla Motors releases the Roadster. The car managed to reach 245 miles (394 km) on a single charge, and its performance was similar to that of many petrol-powered sports cars. Byers were given a federal tax credit of $7,500 for purchasing an electric car, but the Roadsters price of $109,000 meant that the car was a luxury item reserved for the few.

2008: Elon Musk becomes CEO

In 2008, Eberhard and Tarpenning departed, and Musk took over as CEO.

Model S

In 2012, Tesla abandoned the manufacture of the Roadster to focus on the new Model S sedan. The Tesla Autopilot introduced semiautonomous driving in 2014 on the Model S (and later on other models).

In 2012, Tesla created stations for charging batteries called Superchargers in the United States and Europe. Tesla owners could use these for free.

Model X

In 2015 a crossover vehicle, the Model X, was released. The Model X featured a battery range of about 340 miles (547 km) and could seat up to seven people.

Gigafactories

In 2016, we have the appearance of large factories for producing batteries and vehicles. These Gigafactories first opened in Reno, Nevada, Buffalo, New York, and Shanghai, China.

Model 3

The more affordable Model 3 sedan with a price tag of $35,000 begins to be produced in 2017. It becomes the best-selling electric car of all time.

Solar energy

In 2015, Tesla expanded its operations to include solar energy products such as batteries to store electric power from solar energy. The company the next year bought the solar panel company SolarCity. In 2017, following its expansion into other areas, Tesla Motors changed its name to Tesla, Inc.

Twitter and controversy

In 2018, following a series of “misleading” tweets where Musk claimed to take Tesla private, the US Securities and Exchange Commission (SEC) charged him with securities fraud. Tesla‘s board rejected a proposed settlement from the SEC, which drove Tesla’s stock lower. The board finally agreed to settle. Both Tesla and Musk were charged with a $20 million fine.

Model Y

In 2020, Tesla released the Model Y, which was cheaper than the Model X and was made from the same parts as the Model 3.

Tesla announced the release of various other models throughout the 2020s, including a second version of the Roadster, a semi-trailer truck, and the Cybertruck, a pickup truck.

Acquisition of Twitter

More controversy followed Musk after his indecision to acquire Twitter. By April 2022 he became Twitter‘s largest shareholder and was invited by Twitter to join its board of directors. While he accepted, he then declined the offer. The same month he proposed to buy Twitter, and his offer of $44 billion was eventually accepted on 25th of April 25. By July, he changed his mind again, and the company filed a lawsuit against Musk. Before the trial, Musk announced he would proceed to buy Twitter and the deal was closed on 27th of October 27. Since Musk bought Twitter, the Tesla stock has weakened. In order to finance the Twitter takeover, he sold billions of dollars’ worth of his Tesla holdings. But he also remained an active Twitter user, regularly posting provocative tweets targeting those with centre-to-left political views and whom he describes as enemies with a “woke mind virus.”

Teslas share price falls

Musk has been criticised for his tweets which have personally attacked different public figures. He took a shot at Antony Fauci, the Director of the National Institute of Allergy and Infectious Diseases by tweeting: “My pronouns are Prosecute/Fauci.” Fauci is the top immunologist who disagreed with President Donald Trump on reopening the country in 2020. Musk was against the pandemic lockdowns and had challenged restrictions that affected Teslas factory in California.

White House press secretary Karine Jean-Pierre described Musk‘s tweets about Fauci as “incredibly dangerous” personal attacks. Tesla shareholder and Nia Impact Capital founder Kristin Hull tweeted: “So many issues with the Tesla brand when the board can’t rein in the CEO.”

But is not just Musk‘s controversial tweets that have had an impact on Tesla’s stocks. Economic conditions and delayed mass production of the pickup truck, the Cybertruck, have also had a negative impact.

Tesla is also facing criticism over years of delay in providing self-driving technology through software updates to its customers cars. Customers are suing Tesla and asking to be refunded for self-driving systems they paid for but never got delivered.

False advertising around driver assistance systems such as Autopilot, Enhanced Autopilot and Full Self-Driving capability has also influenced the stock‘s price. These systems are not safe to be driven without a human behind the steering wheel. The California Department of Motor Vehicles (DMV) has investigated Tesla and has filed two separate complaints with the state’s Office of Administrative Hearings on the 28th of July 2022. The agency argued that Tesla made “untrue or misleading” claims about its vehicles autonomous driving capabilities.

Tesla cuts prices of Model S and Model X

On 6th of March 2023, Tesla Inc. (TSLA.O) cut prices on its two most expensive electric vehicles after Musk said recent price cuts on other models had fuelled demand.

The price cuts ranged from 4% on Model S to 9% on Model X.

Musk has said Tesla intends to lower prices to increase demand after global discounts introduced in January led to increased orders. A new version of the Model 3—“Highland”—will go into production later this year, while a change to the Model Y—“Juniper”—is anticipated for next year.