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How to Buy Tesla Shares UK for Beginners

Tobi Opeyemi Amure
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How to Buy Tesla Shares UK for Beginners

In a nutshell, to buy Tesla shares in the UK, choose a brokerage that offers access to US stocks, like eToro or Plus500. Open and fund your trading account, ensuring you complete a W-8BEN form to comply with US tax regulations. Then, search for Tesla’s stock ticker ‘TSLA’, decide on the number of shares or the amount you want to invest in, and execute the buy order.

Investing in innovative companies like Tesla can be a game-changer, and I’ve put together a straightforward guide on ‘How to Buy Tesla Shares in the UK’ to help you navigate this journey.

In just a few steps, you’ll learn the essentials of investing in Tesla from the UK, ensuring you make informed decisions.

This article was reviewed by Tobi Opeyemi Amure, a trading expert and writer at InvestopediaInvesting.com, and Trading.biz.

How to Buy Tesla Shares in the UK – Step-by-Step Guide

Here’s a simple step-by-step guide to help you invest in Tesla shares.

1. Set up a share dealing account

Begin by selecting a trading platform or app like eToro, Plus500, or IG, ensuring it offers access to US shares. Opening an account is usually a quick online process, requiring identification such as a driver’s license or utility bill.

You’ll also need to fill out a W-8 BEN form for US tax purposes.

2. Select the right account type

Choose between various accounts to hold your Tesla shares. A General Investment Account (GIA) offers unrestricted investing but may involve Capital Gains Tax (CGT).

Alternatively, a Stocks and Shares ISA shields your investments from CGT, beneficial if Tesla’s stock value rises.

For retirement savings, consider a Self-Invested Personal Pension (SIPP), offering tax relief but with restricted access to funds until a certain age.

3. Fund your account

Deposit funds into your account, which can be done via credit/debit cards or mobile payment options like Apple Pay.

While you don’t have to invest immediately, be mindful that share dealing accounts typically don’t earn interest.

4. Choose your investment approach

Decide on your investment strategy. This could range from direct share ownership to exploring funds or even trading derivatives.

Each option offers different levels of engagement and risk.

5. Make your investment

When ready, proceed to purchase Tesla shares. This involves selecting Tesla within your trading platform and deciding the amount to invest.

Monitor your investment regularly and adjust your strategy as needed.

6. Understanding fractional shares

If full shares are beyond your budget, consider fractional shares. Platforms like eToro and Freetrade allow you to invest in smaller portions of a Tesla share, making it more accessible.

7. Explore mutual funds and ETFs

For diversified investments, mutual funds and ETFs that include Tesla shares might be an ideal choice. This option is particularly suitable for those seeking broader market exposure.

8. Consider CFDs for advanced investors

Experienced investors might explore Contracts for Difference (CFDs). These allow speculation on Tesla’s stock price movements without owning the shares.

Be aware, CFDs carry higher risks and fees.

Best Place to Buy Tesla Shares UK

In 2023, around 2 in 5 Brits (42%) invest and trade, up from 36% in 20211.

Choosing the best trading platform for investing in Tesla shares is crucial for newcomers in the market.

Having worked in the retail investment sector in London over the last four years, I had the opportunity to experience the rise first-hand.

Additionally, in my role working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”, I was able to work with and test some of the biggest UK stock brokers in the market.

Using my experience in this field, I’ve picked two of the best places to buy Tesla shares in the UK.

Factors such as fees, commissions, usability, trading platforms available, research tools, educational materials, and additional features were considered.

Both of the platforms I’ve reviewed below are regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA) or similar.

1. eToro – Overall best place to buy Tesla stock UK

eToro – Overall best place to buy Tesla stock UK.

eToro emerges as a top choice for UK investors looking to buy Tesla shares, combining ease of use with a robust array of features.

As a multi-asset platform, eToro provides access to a wide variety of investment options including stocks, ETFs, forex, and cryptocurrencies.

Its real-time access to global markets, including Tesla shares, makes it an ideal platform for both beginners and experienced traders.

Security is paramount with eToro, as it is regulated by the Financial Conduct Authority (FCA) and other international bodies.

It ensures peace of mind for investors, backed by the Financial Services Compensation Scheme (FSCS) that covers investments up to £85,000.

The platform is known for its innovative features like copy trading, where users can mimic the trades of successful investors. eToro’s ProCharts tool offers advanced technical analysis, crucial for informed trading decisions.

The platform also boasts over 40 diversified investment portfolios, catering to various market interests.

In summary, eToro’s combination of user-friendly interface, diverse asset range, innovative features like copy trading, and regulatory compliance makes it an excellent choice for UK investors aiming to buy Tesla shares.

Whether you are a novice or an experienced trader, eToro caters to all levels with its efficient and cost-effective trading environment.

Read my complete eToro review.

Zero commission means that no broker fee will be charged when opening or closing the position and does not apply to short or leveraged positions. Other fees apply including FX fees on non-USD deposits and withdrawals. Your capital is at risk. For more information, click here.

2. Plus500 – Good for trading Tesla CFDs

Plus500 – Good for trading Tesla CFDs

Plus500 stands out as a premier choice for UK traders looking to engage in CFD trading, especially for Tesla stock.

As a platform regulated by the Financial Conduct Authority (FCA) and protected under the Financial Services Compensation Scheme (FSCS), it offers a high level of security for traders’ capital.

This platform is renowned for its extensive access to international markets, covering stocks from a multitude of countries including the UK, US, Germany, South Africa, and many more.

With a broad selection of asset classes like indices, ETFs, forex, and commodities, Plus500 caters to a wide range of trading preferences.

One of Plus500’s key attractions is its commission-free trading across all supported stock markets. The platform enhances trading with advanced tools that enable traders to manage their profits and losses effectively.

Features like market sentiment indicators provide valuable insights into buyer and seller dynamics.

Overall, Plus500 presents a robust and secure environment for trading Tesla stock CFDs.

Its blend of advanced tools, no trading commissions, and innovative analytics makes it an attractive platform for UK traders seeking to navigate the dynamic world of CFDs.

Read my Plus500 review.

Frequently Asked Questions About Buying Tesla Shares in the UK

Here are some answers to some of the most asked questions regarding purchasing Tesla stock in the UK.

Can I buy Tesla shares in the UK?

Yes, you can buy Tesla shares in the UK. This is typically done through an online broker or trading platform that offers access to US stocks. Make sure the chosen platform supports trading on the NASDAQ, where Tesla shares are listed. Some popular options for UK investors include eToro, Plus500, and IG.

Should UK investors buy shares in Tesla?

UK investors considering Tesla shares face a decision that hinges on several factors. Firstly, Tesla’s status as a leading electric vehicle (EV) and clean energy company positions it in rapidly growing markets.

This growth potential is a key attraction for investors. However, it’s important to balance this with the inherent volatility in Tesla’s stock, often influenced by market trends and company-specific news.

Investors should assess global market trends, especially those affecting the EV and renewable energy sectors.

While Tesla shows promise in these areas, the stock’s performance can fluctuate, impacted by factors like technological advancements, regulatory changes, and competition.

Such market dynamics can affect the stock’s value, influencing investment decisions.

For those with a long-term investment perspective, Tesla’s continuous innovation and expansion might present a compelling case. However, short-term investors must be cautious of the stock’s volatility.

It’s crucial for investors to align their Tesla investment with their financial goals and risk tolerance.

Is it safe to invest in Tesla?

Investing in Tesla, like any stock, carries inherent risks and potential rewards.

Tesla’s position as a leading electric vehicle manufacturer offers growth potential, yet its stock can be volatile, influenced by market trends and company-specific developments.

Investors should evaluate their risk tolerance and investment goals when considering Tesla. It’s advisable to stay informed about the company’s performance and sector-specific factors to make an informed decision.

How to sell Tesla shares?

  1. Log in to your brokerage account where you hold Tesla shares.
  2. Navigate to the trading section and search for Tesla’s stock ticker, ‘TSLA’.
  3. Enter the number of shares you wish to sell and choose the type of sell order (e.g., market, limit).
  4. Review and confirm the transaction details.
  5. Execute the sale order and monitor the execution status.

Why invest in Tesla?

Tesla stands out as a leader in the electric vehicle (EV) industry, a sector poised for significant growth.

Its commitment to innovation and expanding its product line, including cars, batteries, and solar products, positions Tesla at the forefront of the green energy revolution.

This leadership offers a compelling reason for investment, as the shift towards renewable energy and EVs gains global momentum.

Tesla’s strong brand and its CEO, Elon Musk’s visibility, add to its appeal. The brand is synonymous with cutting-edge technology and sustainable energy, attracting a growing customer base.

Tesla’s market presence, combined with its ambitious growth plans, suggests potential for long-term gains, making it an attractive option for investors.

However, it’s important to consider the risks. Tesla’s high market valuation and stock volatility require careful consideration.

Market dynamics, competition, and regulatory changes can impact Tesla’s performance. Investors should weigh these factors against their own investment strategy and risk tolerance.

What to consider before investing in Tesla shares?

Before investing in Tesla, it’s crucial to evaluate the company’s standing in the electric vehicle (EV) market.

Tesla’s role as a leader in EV innovation and its track record of sales and growth should be considered.

Analysing Tesla’s financial statements and recent performance helps gauge its stability and future potential.

Tesla’s stock is known for its volatility, influenced by market trends, company news, and Elon Musk’s public statements. Investors should be prepared for potential short-term price fluctuations.

Understanding one’s tolerance for such volatility is key to making an informed decision.

The EV and renewable energy sectors are rapidly evolving. Investors should stay informed about industry trends, regulatory changes, and competition.

This knowledge is vital to understand how external factors may impact Tesla’s future growth and stock performance.

Tesla’s investment appeal often lies in its long-term growth prospects in the EV and renewable energy markets.

Investors should consider their investment horizon and whether Tesla aligns with their long-term financial goals.

How to buy Tesla shares UK for beginners?

  1. Choose a Broker: Select an online broker or trading platform that offers access to US stocks, like eToro or Plus500.
  2. Open an Account: Sign up for an account with your chosen broker, providing necessary identification like a driver’s license or utility bill.
  3. Complete Tax Forms: Fill out a W-8BEN form for US tax purposes, required for UK investors buying US stocks.
  4. Deposit Funds: Add funds to your account using a debit card, credit card, or bank transfer.
  5. Research Tesla: Understand Tesla’s market position and recent performance. Consider if it aligns with your investment goals.
  6. Buy Shares: Search for Tesla (TSLA) on your platform, decide on the amount to invest, and purchase the shares.
  7. Monitor Investment: Regularly check the performance of your Tesla shares and stay informed about market news.

What are the risks of investing in Tesla shares?

Tesla’s stock is known for high volatility. This means its share price can rapidly increase or decrease in value over short periods.

Factors like market trends, company news, and CEO Elon Musk’s public statements often drive this volatility.

The electric vehicle (EV) market is becoming increasingly competitive. Many established car makers and new firms are entering this space.

This heightened competition could impact Tesla’s market share and growth prospects.

Tesla, like all automakers, faces regulatory challenges. Changes in environmental policies, trade regulations, and subsidies for electric vehicles can affect Tesla’s operations and profitability.

Tesla’s success heavily relies on continuous innovation and technological advancements.

Any slowdown in these areas could hinder its ability to stay ahead of competitors and meet consumer expectations.

Investing in Tesla shares involves considering these risks.

Potential investors should weigh Tesla’s volatile stock, competitive market landscape, regulatory environment, and reliance on innovation when making investment decisions.

Is it worth buying one share of Tesla?

Deciding whether to buy a single share of Tesla depends on your investment goals and budget. While one share may be more affordable, its impact on your overall portfolio could be minimal.

Consider if this investment aligns with your financial objectives and risk tolerance.

Tesla’s market performance is subject to volatility and industry trends. One share will be affected by the same market dynamics as multiple shares.

Stay informed about Tesla’s performance and the broader electric vehicle (EV) market to assess potential growth or risks.

Consider your investment horizon. If you’re looking at long-term growth, a single share of Tesla could potentially appreciate over time.

For short-term goals, however, the impact of one share might be limited.

What’s the best time to invest in Tesla stock?

Determining the best time to invest in Tesla stock requires thorough market research. Keep an eye on Tesla’s financial reports, industry trends in electric vehicles (EVs), and renewable energy.

Market conditions, such as dips or peaks in Tesla’s stock price, can signal potential investment opportunities.

Your investment strategy plays a crucial role. For long-term investors, the exact timing may be less critical than for short-term traders.

Long-term investors might focus on Tesla’s growth potential over years, while short-term traders may seek to capitalise on immediate market movements.

Be aware of external factors that can impact Tesla’s stock. These include economic news, tech advancements, regulatory changes, and even public statements from CEO Elon Musk.

Such factors can cause short-term fluctuations in Tesla’s stock price.

There is no universally ‘best’ time to invest in Tesla stock. It depends on individual investment strategies and market analysis.

Stay informed and consider your financial goals and risk tolerance when deciding to invest in Tesla.

What’s the minimum required investment for Tesla?

The minimum investment in Tesla depends on its current stock price and the policies of your chosen broker.

The price for one share of Tesla varies, so check the latest stock price for the current minimum investment.

Many brokers now offer fractional shares, allowing you to invest in a portion of a Tesla share.

This means you can invest with a smaller amount than the price of one full share. The minimum amount for fractional shares varies by broker.

Additionally, brokers may have their own minimum deposit requirements. This is the smallest amount you can deposit to start trading.

Check your broker’s terms to understand their specific requirements.

Final Thoughts

Buying Tesla shares in the UK is an accessible and potentially rewarding investment option, especially for those interested in the growing electric vehicle and renewable energy sectors.

By choosing the right broker, understanding the investment process, and being aware of the associated risks and market dynamics, UK investors can effectively navigate their way through investing in Tesla.

Whether you’re a beginner or an experienced investor, it’s crucial to align your investment in Tesla with your financial goals and risk tolerance.

With diligent research and strategic planning, investing in Tesla shares can be a valuable addition to your investment portfolio.

FAQs

Does Tesla pay dividends?

No, Tesla does not currently pay dividends to its shareholders. The company has historically reinvested its earnings back into the business to fuel growth and expansion, rather than distributing them as dividends.

What’s the cheapest way to buy Tesla stock?

The cheapest way to buy Tesla stock is through a platform offering commission-free trading, like eToro. eToro allows investors to purchase Tesla shares without incurring traditional trading fees. Additionally, eToro supports fractional shares, enabling investment in Tesla for a fraction of the price of a full share. However, be aware of other potential fees such as currency conversion fees when trading on eToro.

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Sources:

  1. https://www.finder.com/uk/investment-statistics ↩︎

Will Fenton is the founder of Sterling Savvy. He is a personal finance expert and writes about trading, investing, budgeting, and other financial topics.

Along with his education in Economics & Finance, he has experience working in the financial services industry in London working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”.

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