Shields you from airborne projectiles. Stuns you for 4 seconds when broken.
Tesla Shield is a yellow slot item that creates a barrier around the user to protect from any projectiles. However, this barrier will not protect against splash damage, torpedoes, incendiary damage, Tesla Bolt, or freezing items. If the barrier is broken, the user will be stunned for 4 seconds, unless it was broken by Tesla Bolt, which will cause no stun. The barrier is not affected by the defense stat. Damage from incendiary weapons will be taken all at once instead of over time. The barrier cannot be critically hit.
Before the 4.0 update, Tesla Shield received its talents from Dr. Buzzkill.
A mortar or grenade can be blocked using a Tesla Shield by being right in the middle of where the actual projectile would hit.
As long as there are still some hitpoints left on a Tesla shield, it can block any amount of damage from airborne projectiles. For example, if a Tesla Shield blocked 1000 hitpoints, and it took a hit for 999 hitpoints, the Tesla Shield would still have one hitpoint left on it and therefore can still block any hit that is larger than one hitpoint, though the player will get stunned afterwards.
If an enemy's Tesla Shield can be broken in one hit, you should try to break it for a free stun, but if it's not broken with one shot, leave it alone. Of course, it all depends on the situation.