Gasoline’s best days might be behind it as Elon Musk Tesla Motors Inc (NASDAQ:TSLA) and other green alternatives are set to halt demand growth in the next 25 years, according to the International Energy Agency (IEA).
Naturally, this will have a profound global effect on energy consumption and the world economy more broadly. Currently, one in four oil barrels consumed worldwide is gasoline.
IEA Executive President Fatih Birol said that the number of electric cars on the road will skyrocket from a little more than one million last year to more than 150 million by 2040. (Source: “Tesla Shock Means Global Gasoline Demand Has All But Peaked,” Bloomberg, November 21, 2016.)
While we might have seen the heyday of peak gasoline, the IEA doesn’t see oil following suit anytime soon. The organization believes that demand will remain strong and see growth for several decades as the consumption of diesel, fuel oil, and jet fuel by the trucking, aviation, and petrochemical industries continue to push oil demand.
But Royal Dutch Shell plc (ADR) (NYSE:RDS.A), the world’s second-biggest energy company based on market value, has a much grimmer view on the oil market. Specifically, one of the company’s senior executives said that overall oil demand could peak in as little as five years.
So what does all this mean for Tesla? Essentially, oil and gas companies are taking notice of the potential revolution stirring in Tesla’s “Gigafactory.” And Tesla isn’t exactly hurting that perception.
Take this week, for example. Elon Musk Tesla announced both a successful merger with SolarCity Corp and the development of solar panels priced cheaper than standard roofing material and that solar panels are able to power an entire island in American Samoa. Not too shabby. I mean, what have you done this week?
Which is to say, whether you believe in the green revolution or not, Elon Musk Tesla is certainly growing, both in stock value and in ambition. Whether the company kills gasoline and oil within the decade is obviously up for debate, but it’s impossible to discount Tesla’s positioning of itself as a major player in the near- to long-term future of green tech.