Hi all.
Had an interesting question today and couldn't really find much data on this, so maybe someone knows right off the bat.
Let's consider a company like TSLA, although not exactly Tesla as its valuation is not exactly fundamentally driven (IMHO). My logic says that electric cars (and car industry in general) which are still slightly more expensive will face a much lower demand until we see an economic expansion after COVID. Thus, I was wondering how this reflects on their suppliers (e.g. companies that produce batteries, electronic/charging components etc.)
Is the suppliers' stock expected to drop more in value (e.g. bc TSLA or WW or BMW hold their prices because of higher stock support/brand recognition) or less? I assume that if the suppliers are well diversified then it shouldn't be a problem on average, but still their stocks could be less bought than the carmaker brands' stocks as they are less known and therefore face greater price decline?
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