A R10,000 investment in electric vehicle and clean energy company Tesla made at the beginning of 2011 would have grown to over R2.9 million now.
Tesla Motors, named after inventor Nikola Tesla, was founded in 2003 by engineers Martin Eberhard and Marc Tarpenning.
Elon Musk joined the company in 2004 as chairman after investing $6.3 million in Tesla during a Series A investment round.
Musk took over as CEO in 2008 and helped to take the company public on 29 June 2010. Tesla’s initial public offering (IPO) at a share price of $17.00 raised $226 million.
Tesla’s shares did not move much during the first three years but then increased by around 500% between April 2013 and February 2014.
After this spike, the share price traded in a relatively narrow band until the end of 2019 when the stock popped.
Between 2 December 2019 and 31 December 2020, the Tesla share price increased by 971%.
So significant was the company’s growth that the S&P 500 Index Committee announced it will join the S&P 500 on 21 December.
This gave Tesla’s share price a further boost and helped it to easily outperform top tech companies like Amazon, Apple, Microsoft, Facebook, Netflix, and Google over the last decade.
Tesla’s astonishing share price growth also means that the company is now worth more than most prominent motoring companies put together.
Despite this strong performance many people, including Kynikos Associates founder Jim Chanos, remains sceptical about Tesla’s valuation.
Chanos said Tesla’s sky-high valuation dwarfs that of other, more successful automakers and is not based on a realistic view on how many cars Tesla is likely to sell.
Tesla bulls, however, argue that the company is far more than a car manufacturer. Instead, they see it as an automated transportation, clean energy, and electric vehicle company.
R10,000 investment over 10 years
To show just how impressive Tesla’s performance was over the last decade, we compared it to prominent tech companies which helped to push the S&P500 to an all-time high last year.
Amazon, Apple, Microsoft, Facebook, Google, Nvidia, and Netflix all achieved incredible growth over the past few years.
With these tech giants showing 10-year share price growth of between 490% and 3,291%, technology was definitely the right investment strategy in recent years.
Tesla’s 13,140% share price increase over the past 10 years, however, dwarfs that of the tech giants.
An added benefit to South Africans who invested in companies like Tesla, Google, or Microsoft is that the rand also weakened significantly over the last decade.
At the end of 2010, a US dollar cost R6.60. Fast forward 10 years and the local currency weakened to R14.69 against the greenback.
This means that any US dollar-based investment would have more than doubled in rand value simply because of the weakening of the ZAR.
The sections below show how much you money would have had on 31 December 2020 if you invested R10,000 in these companies ten years ago.