Tesla Just Posted Record Quarterly Profit -- Does Your Portfolio Need EV Exposure?

High energy prices have reignited positive clean energy sentiment.

Tesla Inc. shares surged in premarket trading after the electric vehicle company posted its highest quarterly profit to date; the stock rose 7.1% before the opening bell on Thursday. As of midday Thursday, Tesla stock is up over 6%.

Late Wednesday, Tesla reported a record profit of $3.3 billion for the first three months of the year and signaled that vehicle production would keep growing despite shutdowns in China. Chief executive Elon Musk said the company would likely produce more than 1.5 million vehicles in 2022, up 60% over last year, the Wall Street Journal reports. 

The ALPS Clean Energy ETF (ACES) offers meaningful exposure to Tesla (5.7% weight as of April 21), in addition to other North American companies that enable the evolution of a more sustainable energy sector, and includes activities such as renewable energy sources (solar, wind, hydropower, biofuels), clean technologies (electric vehicles, battery technology, fuel cells, smart grids), and any other emerging clean energy technology.

ACES gained 11.67% last  month, outpacing the WilderHill Clean Energy Index (ECO) as clean energy stocks continued to rise amid global tensions between Russia and Ukraine shining a light on the need for less reliance on fossil fuels.

The best-performing segment of ACES in March was EVs, with five names gaining over 20%. The space has been uniquely positioned to benefit from favorable legislation. 

The Biden administration invoked The Defense Production Act with $750 million to boost U.S. production of materials needed for EVs and EV infrastructure. The U.K. government also announced an expansion of EV charging points from 30,000 to 300,000 by 2030 in a clean energy plan worth over 1.5 billion euros, according to ALPS.

Other funds that offer similar exposure to Tesla include the Wahed FTSE USA Shariah ETF (HLAL), the KraneShares Electric Vehicles & Future Mobility Index ETF (KARS), and the Invesco MSCI Sustainable Future ETF (ERTH).

For more news, information, and strategy, visit the ETF Building Blocks Channel.