Local army of Tesla investors hit paydirt

The most popular international stock held by Australian investors is shooting the lights out – but what’s it worth?

There is every chance Tesla owners are also shareholders, though nobody seems to keep data on that. Above, Tesla CEO Elon Musk arrives on stage to greet visitors for the opening of the new 'Gigafactory' of the US carmaker in Gruenheide, east of Berlin, earlier this month. Picture: Patrick Pleul / dpa / AFP

Hey Tesla driver, you might have spent your money the wrong way. You should have bought the shares – the company just broke the $US1 trillion ($1.33 trillion) valuation.

How much are you going to get for that car second-hand? If you had bought the shares less than a year ago you could have supported electric cars – and doubled your money at the same time.

As it turns out, Australia has a lot more Tesla shareholders than car owners, and they are celebrating a rerating the electric car maker is achieving in a week that just happens to be the lead-up to the Glasgow Climate Conference on October 31.

In fact, Tesla is the most actively traded international share among Australian investors. At online broker CommSec, roughly one dollar in 20 going through the international platform goes on Tesla, and 77 per cent of that is for buy orders.

Tesla has now crossed the key $US1000 mark to trade near $US1025 and has soared by 114 per cent over the past 12 months.

At these levels, it has become one of the biggest plays in the market for an army of Australian investors now that Afterpay has been bought out by US payments giant Square.

In common with Afterpay, the Tesla story splits investors into believers and nonbelievers. When Afterpay received its takeover bid from Jack Dorsey’s Square at $126.21 a share, investment bank UBS famously had a valuation of $42 on the company.

In a very similar vein, the predictions of what Elon Musk’s diversified electric carmaker is worth range spectacularly.

In the US, stockbroker Bernstein has stood out for its scepticism on Musk and Tesla, with high-profile analyst Tony Sacconaghi reiterating a $US300 valuation on the stock some weeks ago.

More typically, brokers will put the forward price target on Tesla tantalisingly higher than it trades at any given time. Plenty of brokers suggest Tesla’s next stop will be $US1200 – including influential Morgan Stanley analyst Adam Jonas, who raised his price target to $US1200 a share, from $US900, at the beginning of the week.

But Sydney fund manager Holon Global Investment has gone out on a limb with an extraordinary valuation: “We value Tesla’s current share price at $US3369,” it suggested a few weeks ago.

Analyst Tim Davies at Holon makes his case on the basis that electric car sales will be twice as high as current estimates and Tesla will “continue to race ahead and dominate”. In fact, Davies says his assumption model has now updated the valuation to $US3400.

Behind the sharemarket action is the real world milestones racked up by Tesla – it is making an estimated $US10,000 margin on each car it gets out the door, and it appears to be on track to sell 20 million units a year.

The powerful 10 per cent jump in Tesla this week came after global car hire company Hertz said it had ordered 100,000 units to electrify its fleet.

But Musk was quick to underplay the Hertz deal, suggesting that the company’s major challenge was producing cars, not finding buyers.

There is every chance Tesla owners are also shareholders, though nobody seems to keep data on that.