Young investors are betting big on Tesla’s impact on Wall Street and rival OEMs

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posted on EVANNEX on March 09, 2022, by Peter McGuthrie

Millennials and Generation Z are collectively beginning to weigh financially on Wall Street. In doing so, many analysts are noting how the market will be impacted for decades to come, with companies like Tesla enjoying strong support from these age groups.

Above: Tesla’s Model 3 (Source: EVANNEX; Photo by Casey Murphy)

Younger generations favor high-risk, high-return stocks, according to Investor’s Business DailyTesla being one of the top picks among Millennials and Gen Z.

Millennials and Generation Z are also expected to inherit nearly $70 trillion from baby boomers over the next few decades. They are also more focused on investing their money in environmentally and socially conscious businesses than previous generations.

A recent study has shown the striking contrast between the emissions produced by gasoline cars and electric vehicles throughout the supply chain. As the burgeoning electric vehicle (EV) industry continues to grow, investment from young people is also increasing.

Forbes reports that broker Charles Schwab registered 4 million new clients in 2021, more than half of whom are under the age of 40. The investment app Robinhood now has more than 15 million customers, and the median age of the app’s user base is just 31.

Despite investor concerns about high-risk, high-reward stocks and their volatility, as well as the accessibility of mobile investing, research from the National Bureau of Economic Research has provided insight into how investors apps managed the market through a March 2020 crash.

The study found that “investors on Robinhood did not panic during the market [March 2020] collapse and acted as a stabilizing force in the market. »

Above: A look at how the auto industry is trying to emulate Tesla’s success in electric vehicles (YouTube: Forbes)

Tesla gained 36% in Q4 2021, despite ongoing lawsuit shortage of semiconductor chips which plagued the entire electronics market, including former automaker Ford. Tesla also delivered 308,600 vehicles, pushing the company’s total deliveries to a record 936,172 units.

Tesla management also noted that its factories “have been operating below capacity for several quarters as the supply chain has become the primary limiting factor, which is expected to continue through 2022.”

In 2022, however, Tesla shares fell around 19%, underscoring the stock’s volatility – which some expect to be exacerbated by the ongoing Russian invasion of Ukraine.

Still, while the stock is volatile, growing competition should provide investors with more options for electric vehicles, even as Tesla’s market capitalization still eclipses traditional automakers like Ford.

Ford recently announced plans to revamp its operations, as detailed by Barronswhich CEO Jim Farley hopes will help the company be more competitive in the market, much like Tesla or new electric vehicle companies Lucid and Rivian.

Ford’s restructuring will separate the company into three distinct divisions: Ford Blue, Ford Model e and Ford Pro.

While Ford Blue will continue to focus on internal combustion engine (ICE) vehicles, Ford Model e will turn to electric vehicle development, while Ford Pro will be largely dedicated to utility vehicles. Each division is expected to generate its own profit and loss accounts by 2023, which Ford executives hope will eventually propel the electric vehicle business to stock levels similar to Tesla’s.

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Sources: Investor’s Business Daily / Forbes / Barrons