Should I buy Tesla shares from Australia? Only if you’re going to hold for 5-10 years

Should I buy Tesla shares from Australia?

The world’s largest and most famous electric vehicle maker may seem like a no-brainer for investors wanting a safe growth stock. After all, electric vehicle demand is only going to keep growing and there’s a very long way to go. They are still a single digit percentage of used car sales in many markets including Australia and the USA.

While it has not been an entirely smooth journey for Tesla, the stock is up nearly 20% in the past year. What’s been going on?

Introduction to Tesla (NDQ:TSLA)

Tesla was founded in 2003 and was named after Serbian engineer Nikola Tesla. Elon Musk initially joined in 2004 as a strategic investor, but became CEO in 2008. There actually were electric vehicles before Tesla – just ask GM which produced the EV1 in the late 1990s. But it ended up ceasing the program because it could make it profitably.

Tesla’s first car, the Roadster, was released in 2008 but it was discontinued in 2012 as Tesla released its Model S sedan and chose to focus on it. It released the Model X in 2015 (a mini SUV), the Model 3 sedan in 2017 and Model Y in 2020. It has also for several years focused on solar energy products (including storage systems and energy-generating tiles) and therefore changed its name to Tesla Inc. from Tesla Motors.

The company listed in 2010 at $17 per share. After two share splits (a 5-for-1 split in 2020 and a 3-for-1 split in 2022), these original shares are only worth $1.13.

There have been plenty of controversies over the years including Elon Musk promising to take Tesla private, claiming (wrongly) that he secured funding and then getting fined by the SEC. It had a horror year in 2022 from a share price perspective as countries began cutting EV subsidies and competition ramped up, especially in China. True, legacy car markets lost Round 1 of the battle to Tesla – but it was only Round 1. And will consumers keep taking on debt to buy vehicles in a slowing economy?

Ultimately, with a current share price of over US$400, those who have held for several years would be sitting on some good returns.

2025 was a watershed year…in a negative sense

In 2025, Tesla posted its first annual revenue decline as a public company, with full-year revenue falling 3% to US$94.8bn. Net profit collapsed 47% to US$3.8bn, weighed down by sustained price cuts, the expiry of the US$7,500 federal EV tax credit in September 2025, a brutal 39% decline in European registrations (attributable in part to consumer backlash against Musk’s political activity and DOGE involvement), and an intensifying competitive environment led by BYD, which overtook Tesla as the world’s largest pure-electric vehicle maker with 2.26m units sold versus Tesla’s 1.64m.

The brand damage was quantifiable and significant. Brand Finance estimated Tesla’s brand value had fallen from US$43bn at the start of 2025 to US$27.6bn by early 2026, and its recommendation score in the US reached a new low of 4.0 out of 10. ‘Tesla Takedown’ protests occurred globally throughout the year. The degree to which this is temporary or permanent remains genuinely contested. Nonetheless, it was not all bad news – shares peaked at nearly US$500 in late December due to excitement around the company’s robotaxi pilot launch in Austin, Texas, where the company is now headquartered.

Tesla’s most recent result, reported on 22 April 2026, showed a meaningful operational recovery but with important nuances investors should not overlook. Revenue rose 16% year-on-year to US$22.4bn, and GAAP net income came in at US$477m for the quarter (US$0.13 per share). On a non-GAAP (normalised) basis, EPS was US$0.41 against consensus of US$0.36. Gross margin expanded to 19.2% on a GAAP basis, a 670 basis point improvement year-on-year.

However, much of that margin recovery was attributable to one-time benefits: warranty adjustments and tariff-related items were cited as the primary positive drivers. Clean underlying margin is likely in the 14-17% range absent these items. Vehicle deliveries of 358,023 units, while up 6.3% year-on-year, missed expectations and concealed a widening production/delivery gap of approximately 50,000 vehicles that went into inventory, suggesting demand remains constrained relative to capacity. Energy segment revenue fell 12% year-on-year to US$2.4bn. Positively, paid Robotaxi miles almost doubled sequentially, and unsupervised service expanded to Dallas and Houston in April 2026.

Management also raised full-year capex guidance from US$20bn to above US$25bn, funding AI compute, Cybercab production lines, Optimus factories, and Megapack expansion. That announcement initially wiped out the post-earnings relief rally.

How much growth is expected?

This does beg the question of how much growth will come in the years ahead, not just for electric vehicles but for Tesla specifically. Because competition is indeed heating up, particularly in the Asia-Pacific.

There are varying estimates of how much the EV market will grow. Off the back of a 20% surge in global sales in 2025 to over 20m (13m of which were from China), S&P has projected nearly 23m in sales in 2026 and that EVs will be nearly 25% of global vehicle sales. By 2030, there will be over 30m vehicles sold and they will be over 40% of global sales.

What about for Tesla? Consensus estimates expect 2026 will see US$102.3bn in revenue and a $7.7bn profit, with the latter figure more than double the year before. Then in 2027, US$118.1bn revenue and $9.4bn profit followed by $138bn revenue and a $13bn profit in 2028. In the following two years, even higher growth is projected due to the robotaxi business, Optimus humanoid robots and full-self-driving licensing revenue.

But is it worth it?

At a share price of approximately US$410 and a share count of 3,755m, Tesla’s market capitalisation is approximately US$1.54 trillion. That is the context against which the consensus estimates above must be assessed. Its P/E for FY26 estimates is 200x P/E and 98x EV/EBITDA. And it is little better in FY27 with 163x P/E and 76x EV/EBITDA.

These are not the multiples of a car company. At 6–10x P/E, traditional automotive peers such as Toyota, Ford, and Volkswagen trade on conventional earnings-based metrics. Tesla’s multiple can only be justified if the robotaxi and Optimus businesses deliver at the scale embedded in the FY2029–30 consensus. In other words, the current share price is not pricing the company that exists today. It is pricing the company management says it will become.

The consensus 12-month price target among the 47 analysts covering the stock sits at approximately US$412, essentially in line with the current price. That suggests the market has broadly caught up with near-term expectations and upside from here depends on execution against the longer-term roadmap.

From a valuation perspective, the picture has changed materially from the original article, and not entirely in the bulls’ favour. Previously, we noted a DCF valuation of US$161.45 at a 10.8% WACC using 2024 consensus. On a pure automotive basis, the stock remains structurally expensive relative to peers. The key debate has shifted: it is no longer whether Tesla can grow its car business, but whether its AI and robotics ambitions are real, deliverable, and deserving of a valuation premium that now comfortably exceeds US$1.5 trillion.

Two further headwinds deserve mention. First, Musk’s departure from his DOGE role has not fully repaired the brand damage in Europe and, to a lesser extent, in the US. Second, Waymo has demonstrated that a well-resourced, LiDAR-equipped competitor can scale robotaxi operations ahead of Tesla, already delivering over 450,000 weekly rides across six US cities. Tesla’s camera-only approach is cheaper to deploy at scale, but has attracted NHTSA scrutiny following multiple reported incidents since the Austin launch. Regulatory clearance in states beyond Texas, which has permissive autonomous vehicle rules, is not yet assured.

None of this means Tesla is uninvestable. The energy storage business (Megapack) is a genuinely strong and growing business with 30% margins. The Supercharger network has become an industry standard infrastructure asset. And the Optimus humanoid robot, if it delivers at even a fraction of the claimed ambition, could represent an entirely new revenue stream that dwarfs automotive. The range of outcomes from here is unusually wide — which is both the opportunity and the risk.

So should I buy Tesla shares from Australia?

To answer the question in this article’s title: Only if you’re comfortable with short-term volatility as well as everything additionally you need to take account of when investing in international shares that you don’t when sticking with domestic shares.

Tesla remains a stock where the short-term valuation is difficult to defend on conventional metrics, and where a great deal of execution across several simultaneous, unproven technology platforms must go right to justify the current price.

The share price is, in our view, pricing a scenario where robotaxi, Optimus, and FSD all succeed at commercial scale by 2029–30. That is possible, but it is by no means certain, and the consensus earnings step-change implied in those outer years reflects substantial execution risk. For Australian investors, that risk is further compounded by currency exposure and the practical challenges of monitoring a US-listed, globally operating company with a CEO whose personal conduct regularly moves the stock in ways unrelated to fundamentals.

For investors comfortable with that profile and a long enough horizon, Tesla is a legitimate holding. For those seeking more conventional return profiles with clearer near-term earnings support, the current multiple at 200x normalised FY2026E earnings leaves very little room for error.