According to some media reports, starting from its first car, the Roadster, Tesla seems to be a company determined to lead the automotive industry toward electrification. While this view is true to a certain extent, Tesla's competitors are not limited to the auto industry, as Musk recently confirmed on Twitter.
"When Tesla, which makes sustainable energy products, is worth more than Aramco, which makes fossil fuels, you'll find the future is good for the planet," Musk tweeted. The main competitors are not Volkswagen, General Motors and Ford, but Saudi Aramco, one of the world's largest natural gas companies by market value.
Tesla is indeed leading the auto industry towards electrification
The Tesla Model S proved that electric cars can be as good as gas-powered cars, if not better. The Tesla Model 3 also proved that there is a market for premium electric vehicles among mainstream car consumers. However, Tesla has maintained that while electric vehicles are the company's most popular product, they are only part of its ecosystem.
So Tesla's main competitor is not Volkswagen, the traditional automaker that Musk says is the most important in the transition to electric vehicles; not GM and Ford, which are expected to roll out a slew of electric models in the next few years; not even Rivian or Lucid, the two emerging EV makers; Saudi Aramco is Tesla's main competitor!
Saudi Aramco is one of the world's largest oil companies by market capitalization
As of May 2022, Saudi Aramco has a market capitalization of $2.431 trillion. However, while Tesla's market capitalization far exceeds that of other automakers at $786.98 billion, the gap between Saudi Aramco and Tesla is still enormous. However, Tesla’s market cap has previously crossed the $1 trillion mark.
It is worth mentioning that Tesla plans to significantly expand its influence in the next few years, not only in the field of automobiles, but also in areas such as artificial intelligence. Products like the Tesla Bot and smart HVAC systems have the potential to make Tesla a household name like Apple. If Tesla can nurture an ecosystem of renewable energy solutions, it will truly be a competitor to the likes of Saudi Aramco, and possibly beat them.
