Tesla Motors Inc (NASDAQ:TSLA) is doing a great job of making cars greener. More so, Elon Musk’s charisma and foresight is making EVs cool and fun to drive. The Model S is still the most-loved car on the road, the Model X is a stunner, and about 400,000 people have dropped $1000 deposits on the mass-market Model 3. Many investors are smiling all the way to the bank because of the massive gains in its share price over the last couple of years.
Tesla’s success is bad news for investors in companies that Elon Musk plans to disrupt. Dealerships are still at loggerheads with Musk because his style of selling cars directly to buyers could push them out of business. The biggest losers from Tesla’s success are the players in the global gasoline market. The International Energy Agency says electric cars are killing the global gasoline market and the trend can’t be reversed.
Tesla and others cause global gasoline demand to peak
The IEA has revealed that electric cars led by Tesla Motors Inc are (NASDAQ:TSLA) causing massive disruption in the global energy market. IEA observes that the global demand for gasoline will soon peak and that the demand for gas will taper out in the next 25 years. IEA Executive Director Fatih Birol observed that “Electric cars are happening” and that the number of EVs on the road could soar from 1 million in 2015 to 150 million by 2040.
Tesla’s emerged in the auto market to take EVs to the mainstream and its rapid success has altered the market landscape. In the years past, players in the energy market were secure in their forecasts showing decades of growth and their only fear was that we could run out of oil. Exxon Mobil has once said “global demand for oil and other liquids is projected to rise by about 20 percent from 2014 to 2040.” More so, Tesla’s success is forcing automakers to shift to develop EV lines and now energy firms must rethink their market strategies in order to survive.
Royal Dutch Shell Plc, which is the world’s second biggest firm by market share, has a gloomy outlook on the global gasoline market. The firm’s CFO, Simon Henry observes that “We’ve long been of the opinion that demand will peak before supply… And that peak may be somewhere between 5 and 15 years hence, and it will be driven by efficiency and substitution, more than offsetting the new demand for transport.”
Tesla Model 3 will cripple the U.S. energy market
Stakeholders in the energy industry cannot deny the fact that Tesla is making waves in the market. In September news broke that Tesla Motors Inc (NASDAQ:TSLA) Model 3 could cripple the U.S. energy industry. Researchers at Wood Mackenzie said that the Model 3 could shave off as much as 300,000 Bpd from U.S. gasoline demand.
Director Prajit Ghosh who led the team that wrote report observes that “the impact of Model 3 on the larger energy markets will not be in how many Model 3’s Tesla sells but what it has arguably done to spur wider electric-car production.”