The sell-off sweeping green stocks looks set to continue into 2024, marking the fourth consecutive year of losses for green stocks, according to the latest MLIVPulse survey. The negative sentiment appears set to spread to the broader green asset class, with Tesla Inc seen as potentially losing its status as a top-10 S&P 500 stock.
Nearly two-thirds of the 620 respondents surveyed said they planned to stay away from the electric vehicle industry, and 57% expected the iShares Global Clean Energy ETF (iShares Global Clean Energy ETF) to continue its decline in 2024. The fund is down about 30% this year.
Many clean energy companies are capital-intensive, making them more vulnerable to higher borrowing costs than oil and gas companies with well-established drilling rigs. To make matters worse, wind and solar producers have been hit by project delays due to supply chain bottlenecks, derailed plans and rising costs.
The next green asset class expected to fall is electric cars, as battery-powered vehicles remain too expensive for many households struggling with the long-term effects of inflation, the survey showed. Tesla shares have soared nearly 140% this year, reaching this year's peak in July, but have since fallen about 20%.
Two years ago, Tesla's market value reached $1.2 trillion, making it the fifth-largest component of the S&P 500 Index. Its market capitalization has since fallen below $800 billion, ranking it eighth on the index. Nearly 50% of MLIVPulse respondents expect Tesla to fall out of the top ten next year.