Skip to comments.Morgan Stanley: Gasoline Industry Is About to Become Totally Worthless
Posted on 02/11/2021 1:41:15 AM PST by nickcarraway
The average energy investor is by now well aware of the sector's monumental shift from fossil fuels to renewable energy. Coal-powered power plants have been shuttering at an alarming clip as the price of electricity from natural gas and renewables undercuts them while wind and solar generation continue to gain the ascendancy.
But nowhere has this change been as dramatic as the transport industry, with EV titans such as Tesla Inc. (NASDAQ:TSLA) and NIO Ltd. (NYSE:NIO) now commanding substantially higher valuations than their imposing ICE brethren, General Motors (NYSE:GM) and Ford Motors (NYSE:F). Indeed, the global EV sector now carries a higher valuation than the global ICE sector despite accounting for less than 3% of new vehicle sales in 2020.
It's a situation eerily reminiscent of the thousands of buggy and whip companies that were rendered obsolete in the early 20th century.
But now, a section of Wall Street says the situation is a lot more dire than that.
Morgan Stanley has argued that traditional ICE makers are destined to become money-losers as early as 2030.
MS' analyst Adam Jonas says the market may be ascribing zero or even negative value for ICE-derived revenues at GM and Ford and has listed a variety of factors that are likely to transform the companies' once-profitable assets into potentially cash-burning and loss-making businesses.
Pivoting to EVs
Morgan Stanley is hardly alone in its very dim outlook of the traditional auto industry.
A recent survey on institutional investors by the investment firm has revealed that 17% of respondents think ICE technology has no zero or negative value today, while 60% have rated ICE technology as only slightly positive. Just 23% think gasoline and diesel tech still carries a significant positive value. Related: Oil Prices Slip On Large Gasoline Build
(Excerpt) Read more at oilprice.com ...
Someone is smoking crack. Where is all of that electricity going to come from? Windmills? Solar panels installed just a few years ago are needing replacement because that’s what the Sun does. This recommendation is based solely on banking on Washington’s manipulation of the markets with taxpayer dollars. Back to the glorious days of Solyndra!
Like climate change renewable energy right now is a scam, the technology needs fossil fuel to create their renewables. The shift and sweet talk is for the investors and the government poring our tax dollars down the toilet, remember solyndra, there’s a million of them
Nothing to worry about. This failed experiment will no longer be around after fossil fuel is not allowed to produce the raw materials for EVs.
By 2030 we will be back to the horse and buggy era. Sharpen up on your equestrian skills my FRiends
Sure. Forcing everyone except those that can afford EVs onto the bus or train. What might work for Singapore or parts of Europe won’t work anywhere in the US outside of NYC
That site has posted total BS in the past. If I remember correctly, they said high oil prices were good for the economy because of more spending - the old broken window fallacy.
Passenger vehicles account for just 27% of the end market for petroleum-derived fuel. There’s also aviation, maritime, freight, power generation, etc. All that’s going to go away because Tesla sells a few cars and SUVs to trend-conscious folks with money to burn?
Batteries for EV is a real problem. Until someone comes up with a better way to make a battery for a car to run further, charge faster and be manufactured without draining the earth of the specific materials used to make the present technology, EV on a mass scale is a fool's dream.
People will not accept these vehicles until the technology better suits their needs. The Left can raise the price of gas higher and higher all they want but that won't be enough to get rid of the efficient fossil fuel operated internal combustion engine.
Maybe eventually but we're still decades away from switching over to renewable fuels to run the economy.
Never take anything from a firm like Morgan Stanley at face value. Almost always talking their own book (or on behalf of big client(s)), or trying to persuade Joe Retail to sell so they can accumulate cheap, or visa versa.
By the time the technology becomes refined and widely accepted, most people aren’t going to be driving very much anyway.
I got the latest generation of solar panels in October after a year of brownouts and frequency issues from the grid.
This week, despite cloudy skies and intermittent snowfall, they were generating enough power to run my entire house off grid, charge the emergency power (single battery backup), and export to the grid.
We got all the way from 4am to 8pm before the solar and battery arrangement was unable to fulfill our demand. This is a multigenerational house with eight occupants, and two full time offices, over 40 network ed devices and large washing machines capable of taking equestrian gear.
The installer has been in the trade for 25 years and is stunned that we’re getting this in February. My panels were about 75 dollars more expensive, each, than panels that wouldn’t be generating anything at all in this cloud cover.
After the equinox we will be capable of running the entire house off solar, after spending no more than 2500 dollars on panels.
The problem is the panels are too good! We now need a bank of batteries because we can’t use the solar fast enough. The energy company will but it for 5p a unit but sell it back to me at 25p when I need it. I might as well just store it for use at night.
Over the road from me, another house with panels is doing this already and he’s charging 2 hybrid cars.
And once the non-lithium battery market takes off, the cost of the most expensive component of any solar setup will plummet.
In 5 years time you’ll be able to convert your house to full off-grid solar and charge your electric car for free if you have one, all for a one-off spend of 6000 dollars.
And it’ll be good for 12 years minimum.
If you can show me any fossil fuel energy supply that can power my house for 500 dollars a year, please do.
If you can’t... That is why solar is one to watch.
Agree. The hedge funds are running a game on investors and trying to recover their recent losses.
From its website...
“Oilprice works with the largest names in financial news and provides news and analysis to sites such as: CNBC, Yahoo Finance, Nasdaq, Fortune, TIME Magazine, Huffington Post, USA Today, CNN Money, Business Insider and hundreds of others.”
Nuff said, eh?
what a load of crap
Good news! The EV companies no longer need subsidies.
PETA would never allow it. Pedal power.
There is no such thing as renewable energy.
If I’m going back to riding horses I hope AOC likes her saddle.
1). What is projected capacity of electricity production in the US. in 2030?
2). What is the required capacity in 2030 to replace the entire fleet of internal combustion vehicles with electric?
3). How much incremental electrical generation capacity is required to bride the gap?
4). Is there a plan in place today to build the incremental electric capacity required to service the number of electric vehicles needed to replace Internal combustion powered vehicles , plus increase the capacity of the grid to transmit the incremental electricity? We only have 9 years until 2030 so if plans aren’t already on the drawing board and contracts for construction being written today it isn’t going to happen.
A real analyst would have done the math and included it in the article to prove the hypothesis.
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