Morgan Stanley: Gasoline Industry Is about to Become Totally Worthless

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February 11, 2021

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by Alex Kimani (OilPrice.com) The average energy investor is by now well aware of the sector’s monumental shift from fossil fuels to renewable energy. …

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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.

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GM supported the Trump administration’s pro-carbon lawsuit that was meant to force California and several other states with gas-mileage standards to lower them to the national standards. GM, however, flipped after Trump lost in November and withdrew from the suit on Nov. 23 after Biden became the clear winner. …

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Need we say that both ICE stocks have handily outperformed TSLA, which has only managed a 20% YTD return. READ MORE

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