Key Points
Tesla has historically been willing to split its stock when the conditions are favorable. The company first split its shares in August 2020, and then again in August 2022. However, with the stock currently trading below $400 as of June 24, a split this year appears unlikely.
Why Shareholders Cheer Stock Splits
Although a stock split does not inherently increase a company's value, it can have psychological and market effects that appeal to shareholders. For instance, a 5-for-1 split (like Tesla’s 2020 split) would multiply an investor’s share count fivefold, while maintaining their proportional ownership in the company. A pre-split share priced at $1,000 would equate to five post-split shares priced at $200 each.
There are several reasons why some investors support stock splits. One is the perception of a more accessible entry price, which may attract more retail investors. Additionally, research suggests that stock splits can lead to increased stock prices. According to data from Statista, sourced from Bank of America's Research Investment Committee, companies that split their stocks saw average total returns of over 25% in the 12 months following the announcement. However, such splits typically occur after a significant rise in stock price, often signaling strong future performance.
Tesla's Stock-Split History
Tesla's previous stock splits occurred when the company's shares were significantly higher than they are today. On August 11, 2020, Tesla announced a 5-for-1 stock split, with shares trading just under $1,400. The stock surged to above $2,200 before the split. Then, on August 5, 2022, Tesla announced its second split ever—a 3-for-1. The day before the split, shares were trading near $900.
Currently, the stock is trading around $375 on Thursday, far below those levels.
The Likelihood of a Tesla Stock Split in 2026
Based on historical patterns, a stock split in 2026 seems improbable. Past splits occurred when the stock price had risen substantially, and management anticipated continued strong performance. For Tesla, shares would need to nearly triple before another split could be considered. Additionally, companies often split shares when they become too expensive for retail investors. However, with fractional share investing now widely available through most brokerages, many companies may no longer see the necessity of splits, even if shares reach high values.
Instead, a higher stock price may be viewed as a sign of strength, reflecting strong investor demand.
What Matters More Than Stock Splits
For investors considering Tesla, the company’s long-term success will depend more on its advancements in robotics, autonomous vehicles, robotaxis, and energy storage than on any potential stock split.
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Stock Advisor returns as of June 26, 2026.
Bank of America is an advertising partner of Motley Fool Money.
Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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