What is the 5 year return of Tesla?

What is the 5-Year Return of Tesla?

You’ve seen the cars on the road and the headlines in the news. But what if you had put $1,000 into Tesla stock five years ago? The answer isn’t just a number—it’s a story about risk, reward, and the kind of rollercoaster ride that makes Wall Street famous.

For many, the world of investing feels like a private club with a secret language. Conversations about Tesla stock performance can quickly get lost in confusing terms and complicated charts. This guide is different. We’re skipping the jargon to focus on answering one simple question in a way that anyone can understand.

This article will show you how much that hypothetical $1,000 investment would be worth today and, more importantly, explore the journey it took to get there, turning a complex topic into a straightforward story.

What Exactly is a “Return on Investment”?

Before diving into Tesla’s numbers, let’s demystify the term “return on investment,” or ROI. Think of it like this: you buy a rare collectible for $50 and, a few years later, sell it for $150. Your profit is $100. Your ROI is simply a way to measure that $100 profit in relation to your original $50 cost. It answers the fundamental question: “How well did my money work for me?”

Calculating this as a percentage isn’t as scary as it sounds. You just need two numbers: the price you paid and the price it’s worth now. To find your percentage gain, you take your profit (the new value minus the old value) and divide it by your original cost. Using our collectible example, you’d divide your $100 profit by your original $50 cost, which equals 2. Multiply that by 100, and you have a 200% return.

This same logic applies to a stock’s performance. By looking at Tesla’s stock price five years ago and comparing it to the price today, we can calculate its return and see exactly how a hypothetical investment would have panned out.

The Big Answer: How Much Your $1,000 in Tesla Would Be Worth

If you had invested $1,000 in Tesla (TSLA) stock five years ago, that investment would have grown to be worth approximately $11,250 today. This represents a remarkable return, transforming your initial thousand dollars into a sum that could cover a significant life expense.

Applying our simple formula shows how we get that figure. Looking at the historical stock price, one share of Tesla in mid-2019 cost around $16 (adjusted for later stock splits). By mid-2024, that same share was trading for about $180. Your profit per share would be the difference: $164.

Framed as a percentage, that growth is even more staggering. Using our calculation—profit divided by original cost—we get a return of over 1,000%. To put that in perspective, the 200% gain on the collectible we talked about was fantastic, but Tesla’s performance over this period was in a completely different league. It’s the kind of return that turns heads and generates headlines.

These numbers represent a snapshot in time, capturing the starting point and the finish line. While they powerfully answer the question of Tesla’s 5-year return, they don’t reveal the journey in between.

Was It a Smooth Ride? A Look at Tesla’s “Rollercoaster” Journey

That 1,000% return is an incredible number, but it doesn’t mean the value of your investment went up in a straight line. The journey for a Tesla investor over the last five years was anything but a smooth, predictable climb. In reality, it was much more like a stomach-churning rollercoaster, complete with breathtaking highs and terrifying drops. Holding on required a strong stomach.

To call it a bumpy ride would be an understatement. There were periods of explosive growth where the stock would double in a matter of months, but there were also long, painful stretches where it went the other way. For example, during 2022, the stock lost over half its value. Imagine watching your investment, which had soared to incredible heights, get cut in half. This is the other side of the coin to massive returns—huge price swings that can test anyone’s nerve.

For anyone who bought five years ago and held on, these dramatic swings were just part of a much larger upward trend. The peaks were higher than the valleys were deep. However, these wild price movements weren’t the only dramatic part of Tesla’s story. The company also made changes that affected the number of shares an investor owned.

Why Your Share Count Grew: Understanding Tesla’s Stock Splits

On top of the wild price swings, investors also ended up with more shares than they originally bought, without spending an extra dime. This is due to a common financial event called a stock split, which Tesla has done twice in the last five years.

A stock split is best understood with a simple analogy: imagine you have a single, large pizza worth $20. A split is like cutting that pizza into four smaller slices. You still have the same amount of pizza and its total value is still $20, but now you hold four slices worth $5 each. At that moment, no new value is created; the existing value is just divided into smaller, more manageable pieces.

Companies often do this when their share price gets very high. A stock trading for $900 per share can feel out of reach for many people. By splitting the stock, say 3-for-1, the company turns one $900 share into three $300 shares. This makes the stock more accessible and affordable for a wider range of investors without changing the overall value of the company.

This is why we use what’s called a split-adjusted price to calculate the true 5-year return. This special price accounts for those splits, showing what a single share from five years ago is really worth today after being divided into more shares. Without this key adjustment, the return percentage would be wildly inaccurate. It ensures we’re comparing apples to apples across the entire five-year journey.

How Does Tesla’s Return Compare to the Broader Market?

Knowing Tesla’s massive five-year return is one thing, but understanding what that number means in the real world requires a point of comparison. How does Tesla’s performance stack up against other, more traditional investment options?

To get a fair picture, investors often look at a benchmark like the S&P 500. Think of it as a giant basket holding stocks from 500 of the largest and most stable U.S. companies. Because it represents a huge slice of the economy, its performance is often considered the “average” return of the stock market as a whole.

When we place Tesla’s five-year return next to the S&P 500 and a risk-free option like a high-yield savings account, the difference is staggering. Here’s a rough look at how a $1,000 investment would have grown over the same five-year period in each:

• A High-Yield Savings Account: Might turn $1,000 into roughly $1,150.
• The S&P 500: Would have grown to approximately $1,900.
• Tesla Stock: Would have rocketed to approximately $11,250.

This stark contrast highlights the fundamental trade-off in investing: risk versus reward. While the savings account was completely safe and the S&P 500 offered steady growth, Tesla provided an extraordinary return that came with its famous “rollercoaster ride” of volatility and uncertainty.

What Drove the Price? Key Factors Behind Tesla’s 5-Year Growth

A stock’s journey from a low price to a high one isn’t magic; it’s usually tied to real-world success. For Tesla, one of the biggest stories was its evolution from a niche, luxury carmaker to a mass-market force. Successfully ramping up production of the more affordable Model 3 and opening new “Gigafactories” proved that Tesla could build cars at a massive scale. This shift gave investors confidence that the company’s ambitious goals were achievable.

Beyond building cars, Tesla also had to prove it could be a profitable business. For a long time, the company spent far more money than it made. A critical turning point came when Tesla started posting consistent quarterly profits. This milestone signaled that the company wasn’t just burning through cash to fund a dream; it had a sustainable business model. Proving its financial health was a major green light for investors.

A discussion of Tesla’s stock price must also include the outsized effect of CEO Elon Musk. His public persona and frequent announcements on social media have a direct and powerful impact on the stock’s value. A single post about a new product or production milestone can create a surge of excitement and buying activity. While this has fueled interest, it also contributes to the famous volatility discussed earlier.

What Are the Risks? The Other Side of a High-Return Stock

A story of incredible growth comes with significant risks. For years, Tesla had the electric vehicle market largely to itself. Today, the landscape is completely different. Established giants like Ford and Volkswagen, along with a flood of new EV startups, are all competing for a slice of the pie. More competition means Tesla has to fight harder to stay on top, which introduces uncertainty about its long-term dominance.

Another major consideration is the very factor that helped fuel its rise: Elon Musk. When a company’s identity and stock price are so intertwined with its leader, it creates what’s known as “key person risk.” Any news about Musk—good or bad, related to Tesla or his other ventures—can cause the stock to swing dramatically. This unique reliance on one individual adds a layer of unpredictability.

These factors define Tesla as a high-reward but also high-risk investment. The same forces that can create spectacular growth can also lead to steep drops. Understanding this volatile nature is just as important as knowing the five-year return figure itself.

What’s the Takeaway From Tesla’s 5-Year Journey?

While you may have come here asking for a number, the story behind it is even more valuable. You can now see past a simple percentage and recognize the difference between growth and a smooth ride. Where a headline shows a single fact, you now see a five-year journey full of dramatic highs, lows, and key events like stock splits.

This deeper perspective is a powerful tool. The next time you hear about a company’s gains, you can ask the important questions about volatility, risk, and the reasons behind the numbers. This shift toward a deeper understanding of an investment is a key step in building financial confidence.

The question of whether Tesla is a good long-term investment has no simple answer. Its past is a remarkable story of growth, but it’s just that—a story of the past. You are now better equipped to look at any investment not just for its potential reward, but for the real journey it might take you on.