It’s not just electric vehicle maker Tesla (TSLA). Stocks of renewable energy companies, also known as green energy stocks, are trading at their lowest levels in five years.
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The slump in companies behind solar power, wind turbines, and electric vehicles comes as the energy policies of U.S. President Donald Trump turn investors off green energy stocks. The S&P Global Clean Energy Transition Index has fallen 13.5% in the past year and is trading at levels last seen when the Covid-19 pandemic struck in spring 2020.
The selloff comes after Trump canceled or reversed most of the U.S. energy and climate policies that had been put in place, signing executive orders to boost oil and gas production. Trump has also halted offshore wind permits and eliminated America’s electric vehicle (EV) mandate that provided incentives to get consumers to buy battery-powered cars, dealing a blow to his aide Elon Musk’s company Tesla.
Dismantling Environmental Policies
While TSLA stock is down 40% this year, several other green energy securities are also deeply in the red, including Plug Power (PLUG), which develops hydrogen fuel cells to replace conventional batteries, and solar power company SunRun (RUN).
The Trump administration has frozen the U.S. Department of Energy’s activities pending a review, effectively halting the agency’s $50 billion budget. The U.S. Interior Department has issued a freeze on wind and solar project leases on federal lands and waters. The result is that stocks of solar, wind, and other clean energy companies have plummeted since Trump’s inauguration on Jan. 20 of this year.
Is TSLA Stock a Buy?
The stock of Tesla currently has a consensus Hold rating among 37 Wall Street analysts. That rating is based on 12 Buy, 13 Hold, and 12 Sell recommendations issued in the last three months. The average TSLA price target of $323.83 implies 44.14% upside from current levels.