ESG investing gets co-sign from BofA, Tesla conquering energy market
Tesla is one of the biggest names associated with the changing energy market. Its got goals of making electric cars available to everyone, and attractive. No wonder the company has become a giant in the industry.
Now that the Bank of America showed its approval, it’s likely that the company is only going to become more popular and grow even bigger.
Why does BofA think so highly of Tesla, you ask?
Well, because of the greener future that everyone is hoping for, ESG funds are what investors are looking at more intensely these days.
ESG funds have been part of the investment world for quite some time, but only in recent years got the attention it deserves.
Companies that trade ETFs (exchange-traded funds) in the clean energy sector have seen their value increase greatly.
Despite financial problems since Covid-19, this form of investment has risen in popularity and benefit.
What are ESG funds?
If you’ve been out of the loop, you might be asking ‘just what are ESG funds?’ and it’s not as foreign as it might sound.
They are just investment portfolios in companies that focus on environmental, social and governance factors. For younger investors who care more about the environment, these investments have become very popular.
Tesla offers this kind of investment and that’s part of the reason why the company is so successful. Buying Tesla stock is one way for investors to show they support a sustainable way of doing things.
Elon Musk and his company knows the importance of taking care of the environment, and how electric vehicles contribute to a greener future.
Renewable stocks in areas such as solar and electric vehicles have risen in value towards the end of 2020.
Elon’s company is conquering the energy market, one stock at a time. He is throwing a lot of effort into sustainable energy, and it’s paying off.
On 16 April, Tesla stock was worth $739,78, going up by 0,13% before markets closed. This kind of rise is expected to continue in the future according to Forbes.
The company’s stock periodically increased by almost 17% over the last week. The increase is driven by a wider recovery in technology stocks.
Combined with raised prices on some of the company’s entry-level vehicles, it looks like there is more confidence in the sector, and for the company.
Tesla’s competition, TuSimple raised $1 billion in IPO
There is more to ESG funds and investment than what’s on offer from Elon and his company.
Self-driving truck company TuSimple managed to push its value to $8.49 billion. The company had its IPO (initial public offering), and raised $1,08 billion.
Although shares previously dropped as much as 17%, the company was able to bounce back when trading started. TuSimple priced its shares above its range and was able to gain a lot of investment support.
The group sold almost 34 million shares at a price of $40 each, which is how they managed to raise that much money.
TuSimple is hoping to make a big impact on the global freight market with its self-driving trucking technology.
Navistar NAV will build 5,700 trucks for the company, which are scheduled for production in 2024.
Currently, 70 trucks are already driving around in China and across the United States.
Of course, despite its big dreams, the company has a giant to compete with – Elon’s company.
There are also many projects from Waymo, owned by Google, and the Chinese manufacturer Xiaopeng Motors. Aurora, founded by an ex-Google engineer who partnered with Volvo, should also be kept in mind.
This kind of competition is great for the electric and self-driving industry. If more companies are trying to grab the top spot, there are more options to choose from.
The companies will also have to ensure that their cars are the highest quality while still being affordable.
The energy market has been shifting towards sustainability and renewable options, and it’s finally looking achievable.
Investors are still rushing to oil stocks
Despite the obvious push for sustainability and green solutions, ESG is not enjoying the support it should.
While Elon and those in the same industry are working hard to propel ESG investment, investors are still buying oil stocks.
Oil and gas companies have come under scrutiny and been on the receiving end of public outrage for years. There is a lot of pressure on these companies to consider sustainability and their impact on the environment.
And yet, investors are continuing to support them.
The simple truth is that oil and gas stocks are profitable, and most investors care more about money than ‘being green’.
What spurred recent oil stock support?
The energy sector has been a strong one for years, and oil stocks make out a huge chunk of it.
Recently, oil prices have improved as hope of a normalizing economy grows stronger. This has led to investors rallying behind the stocks once more.
The price per barrel increased to more than $60 per barrel, which drew investors like hungry flies.
It is expected that the industry and related stocks will continue to recover after the pandemic’s initial financial blow.
As that happens, investment will go up as well, and oil stocks will be as popular and in-demand as ever.
Late in 2020, when the first Covid-19 vaccines were approved, oil prices (and the cost of oil stock) jumped. Since then, the price has been going up.
As a result, investors are once again putting their money in the oil industry, trading in oil stocks.
What does this mean?
Investors still like to trade with oil stocks despite the call for these companies to clean up their act.
For them, money and profit is a lot more important than green energy, despite the hard work of the likes of Elon.
However, those investors are of ‘the old sort’ and things are changing. The younger generations want greener energy and solutions.
They want to support companies like Tesla, TuSimple, and Waymo, and take pride when investing in them.
The world has already come a long way from the time when oil was king – it’s being slowly dethroned.
Although it seems like we don’t have a lot of time to save the environment, patience is necessary.
The dedication and passion of Elon and his peers are also making a big impact. His company is conquering the energy market one advancement at a time.
And if companies and institutions the likes of BofA continue to support these innovative companies, they’ll go even further.
Green, sustainable energy and electric vehicles are going to take over, it’s just a matter of when.
Story by Deseré Davis