American oil giant, ExxonMobil Corporation has surpassed Tesla Inc. in market value for the first time in over a year, as reported by Bloomberg. This shift comes as Tesla faces sales slowdowns and investor skepticism regarding the pace of consumer transition from gas-powered to electric vehicles.
Bloomberg reported that Tesla’s stock has plummeted by 41% since the beginning of the year, grappling with concerns over growth, significant layoffs, and its first decline in year-over-year sales since the onset of the pandemic.
Meanwhile, the U.S oil major has managed to reverse a decade-long production decline by leveraging rapid oil developments in Guyana and the Permian basin, maximizing the benefit of crude’s 16% gain this year.
The reversal underscores the challenges inherent in transitioning to electric vehicles, as observed by Ford Motor Co. and Hertz Global Holdings Inc., which are reassessing their substantial investments in electric vehicles (EVs) due to slow market adoption attributed to costs and charging infrastructure limitations.
Moreover, it was reported that Exxon’s resurgence, driven by robust global oil demand, also signals a shift away from the environmental, social, and governance (ESG) movement that reduced the oil and gas industry’s valuations during the pandemic.
According to reports, Exxon plans to increase Permian basin output to 2 million barrels per day by 2027 and aims to reach 1.2 million barrels per day in oil output in Guyana by the same year. The company has significantly expanded its Permian position since 2017, acquiring acreage and shale producer Pioneer Natural Resources to bolster its presence in the region.
