You can now invest in Tesla shares from India and own a part of the EV giant
Your dream of owning a Tesla car may still be a few years away, but in today’s technology-driven world, it is easy to invest in Tesla stocks from India and own a part of the EV giant. In this blog, we answer the question- how to invest in Tesla (TSLA) from India?
Investor interest in the Tesla stock has remained upbeat and not without reason. As a company, Tesla is different from other car manufacturers. Let us look at the reasons why.
First, Tesla is focused solely on electric vehicles and have literally made electric vehicles an aspiration for many. Next, they have superior technology in terms of car parts and batteries they use. Third, they have built an extensive supercharger network spread across 37 countries in the world which means it is easier to charge a Tesla car without having to worry about it running out of charge. Finally, they have a vertical integration in manufacturing as well as distribution which enables them to have a much faster rate of innovation and technology development and at the same time improve profit margins by cutting down on third parties. You can find more information on what differentiates Tesla here.
Now, let us see how to invest in Tesla shares from India. Here are three ways.
1. Directly invest in Tesla stocks
You can invest in Tesla from India by opening a US brokerage account either through technology platforms like Vested that offers this service, or a foreign brokerage that has a direct presence in India. At Vested, our goal is to allow you to invest in US stocks easily. To invest, you do not need to pay any brokerage fee. Vested’s process is completely paperless and can be completed in a matter of minutes. All you need is your PAN number, an image of your PAN card, and address proof.
To invest in US stocks like Tesla, you need to wire funds to the US. As an Indian resident, you are allowed to do this under the RBI’s Liberalized Remittance Scheme which lets you remit up to US $250,000 per year per person.
As of December 27 2021, Tesla’s share price was US $1086.13 which is more than ₹ 81,000. However, the high price should not be a deterrent to investing in Tesla shares as Vested offers you the option of fractional investing in shares. So, you can invest in a fraction of a Tesla share for as little as $1 and own a part of the company. To know more about fractional investing watch this video.
2. Invest in ETFs that hold Tesla stocks
The other way you can invest in Tesla stocks from India is through an ETF. ETFs refer to a collection of many stocks/bonds which are traded under one fund. They are similar to mutual funds. However, ETFs are traded on the stock exchange with real-time pricing and provide an easy and cheap way to get exposure to a sector or a group of companies. One option to invest via ETFs is that you buy an ETF on a platform like Vested.
For example, Vested lets you invest in index ETFs like the Invesco QQQ Trust which is based on the NASDAQ 100 index and has Tesla as one of the top holdings.
Another way to invest in Tesla stocks from India is to buy ETFs available in India that invest in US indices like the Nasdaq 100. The Motilal Oswal Nasdaq 100 ETF in India has Tesla among its top holdings. You can also invest in a fund of fund like Mirae Asset NYSE FANG+ ETF Fund of Fund which has Tesla among one of its ten stocks. Remember, you can invest in these ETFs without opening a new US brokerage account. However, your returns might be impacted by tracking errors that these ETFs suffer from (we explain this in a video here).
3. Invest in Indian mutual funds that have exposure to Tesla stocks
In this case, you will be investing in funds of funds i.e. a local mutual fund that invests in a mutual fund available in the US. Note that there is no investment limit as an investment will be made in Indian rupees. Mutual funds such as Edelweiss US Technology Fund of Fund offer exposure to Tesla but often to a limited extent. Also, this approach may turn out to be more costly. You will have to pay an annual expense ratio (fees charged to manage the fund). The expense ratio of these funds tends to be higher because apart from the general India fund management fee, it also includes an additional expense charged by the underlying international schemes they invest in.
Remember, before buying any stock, you should understand your risk profile. Investing directly in stocks like Tesla would be a high risk investment for your portfolio.
This article is meant to be informative and not to be taken as an investment advice, and may contain certain “forward-looking statements,” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, without limitation, estimates with respect to financial condition, market developments, and the success or lack of success of particular investments (and may include such words as “crash” or “collapse”). All are subject to various factors, including, without limitation, general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors that could cause actual results to differ materially from projected results.
Our team members at Vested may own investments in some of the aforementioned companies. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for an investor’s portfolio. Note that past performance is not indicative of future returns. Investing in the stock market carries risk; the value of your investment can go up, or down, returning less than your original investment. Tax laws are subject to change and may vary depending on your circumstances.