Tesla’s (TSLA) Wall Street edge and why competitors can’t keep up

Tesla enjoyed a major Wall Street rally in 2020. A once-small, potentially unsuccessful automotive company’s meteoric rise is truly a prime example of the American economy working to the dreamer’s advantage. Tesla was out of funding at one time and had to ask investors to funnel in more funds in order to keep its doors open. Years later, despite not having more than two operating car manufacturing plants, the company is the hottest stock in the American economy, up 650 percent this year.

Some might ask: Why is this small, relatively new car company in the industry running amok? What have they got that rivals don’t have? Why is Tesla so much more enticing than any other enterprise to investors now? There are a lot of responses that can answer all of these questions adequately. But the real response that covers all these bases in general is that Tesla is more about the message than about money. Although the supremely high valuation spells something as big as Apple or Facebook, in an industry full of desirable names, Tesla leads a charge. The fact is, Tesla has the shiniest name of all.

Perhaps there might be some real players in the field of renewable energy companies who possess large quantities of influence. But the fact is, up until a few years ago, none of the names, or Tesla, were taken seriously. The idea of sourcing electricity from the sun, wind, and other renewable outlets was not a generally embraced idea in the United States. Although there were wind farms and solar panels all over this country, it wasn’t a big idea to power anything from a house to a business with anything other than coal or natural gas.

But now the notion of renewable energy sources is being transformed into a national phenomenon. And when patterns start to turn, the investor starts to see dollar signs. The thing is this the campaign for renewable energy is here and it’s been here, and it’s only going to get bigger. More individuals will start using solar panels because they’re becoming more affordable to buy for the average American. Since they are becoming more accessible, they need less maintenance, and there are more environmental benefits, more individuals will begin driving electric cars. This is where the renewable energy market is getting more dynamic, and more businesses are searching for a piece of the pie.

For businesses that have a history of using non-sustainable goods, the issue is that their reputation is tarnished, and a new identity will be needed to expunge the mind of the investor from negative thoughts. On the other hand, companies that do not have that history, such as Tesla, for instance, carry to the investor’s mind a conditioned vision of an electric vehicle and sustainable products. And the average investor will be more likely to buy goods from an exciting and somewhat established business than from a company that is switching from gas to electricity and will ultimately have to rebuild itself from the ground up.

The attitude towards businesses that have a viable reputation has shifted. Once “dead end” enterprises have exploded into real market players, the common investor is more attractive to them. People right now don’t care about their dollars; they’re dreaming about the future. The mission of Tesla is about the future, and because they know where the future is going, people invest their money in TSLA shares. They already know who is leading them there, and it is the enterprise that will purchase the shares and see a rise in the stock price. Clean energy has been around for decades, but because gas and oil have created employment and economic stability, it’s only been a second thought. The U.S. renewable energy industry can’t do the same thing for no reason, and it will if jobs are held on American soil.

The act of forgetting investors about the renewable energy revolution is over and Tesla has effectively ended the stigma on stocks of clean energy, showing that they can be winners and big ones.

Obviously, Tesla’s R&D and innovation activities have improved the stock price as well. However, the retail investor is pushing up demand for the stock as well. This is why in a matter of a day and a couple of hours, TSLA’s $5 billion offering was snatched up.

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