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The ‘Tesla Effect’ is stronger than ever with TSLA’s symbolic victory over Exxon

(Credit: Tesla)

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Over Tuesday’s trading, something remarkable happened. Electric car maker Tesla (NASDAQ:TSLA) reached all-time highs, ending the day at $1,079.81 per share with a market cap of $200.278 billion. This allowed the young company to surpass one of the market’s largest oil firms: the juggernaut known as Exxon Mobil Corp. 

In a way, Tesla’s milestone marked what could very well be a huge symbolic victory for renewables, as it highlighted the world’s apparent embrace of sustainability and its impending departure from fossil fuels. This is especially poignant considering that Exxon is currently reeling from what could very well be the worst crude price crash in history. As of yesterday, Exxon’s market cap stood at $189.185 billion. 

Exxon is no joke at all, being the largest oil company in the Western Hemisphere. It also has a storied history, being an offshoot of Standard Oil New York and Standard Oil New Jersey, which were, in turn, rooted in Standard Oil, the dominating force of US energy in the late 1800’s and the early 1900’s. Even with its recent decline, Exxon is still the world’s second biggest energy company after Saudi Aramco went public last year. 

Tesla’s latest milestone is notable, especially considering that the last time an automaker was worth more than Exxon was decades ago. As observed by Tesla community member Eric Dehais, it was over four decades since the oil giant trailed an American carmaker, with Exxon coming in second to General Motors in 1974. Interestingly enough, Tesla’s market cap today is worth several times that of GM’s. 

This shift, if anything, highlights what could be described as a “Tesla Effect” in the market. In a previous interview with CNBC, Paul Sankey of Mizuho Securities mentioned that a “Tesla Effect” of sorts is beginning to make its way to the oil industry. Sankey noted that the Tesla Effect becomes prominent as fossil fuel companies are seeing a decline. 

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“Essentially, the big issue is the so-called ‘Tesla Effect,’ the general ‘End of the Oil Age’ theme that is a problem for these (oil) stocks. As the oil price goes up, especially to the levels we’re at now and potentially beyond, it’s almost as if the Tesla Effect could be exacerbated by the potential for higher oil prices to accelerate the end of the Oil Age. The Tesla Effect is the overall concept that (while) the 20th century was driven by oil, the 21st century will be driven by electricity,” the analyst said.

With Tesla passing Exxon Mobil, it appears that the “Tesla Effect” is still going strong. 

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Investor's Corner

X clarifies xAI prediction market rumors, hints at future plans

Musk’s AI firm denied rumors of a Kalshi deal but left the door open. Prediction markets + AI could change how we forecast everything.

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Credit: xAI

X dismissed rumors of xAI entering prediction market partnerships. In a recent X post, Elon Musk’s company clarified that xAI had not yet entered formal partnerships in the prediction market.

However, xAI clarification hinted at future exploration in the prediction market, aligning with X’s goal to become an “everything app.” The speculation underscores AI’s potential to reshape predictive analytics.

“Recent speculation about xAI’s involvement in the prediction market space has been circulating. While we’re enthusiastic about the potential of this industry and engaged in various discussions, no formal partnerships have been confirmed to date. Stay tuned!” noted the X team.

X’s statement followed a Tuesday post by Kalshi, hinting at a collaboration with xAI, which was deleted hours later. Kalshi suggested that xAI could leverage AI to analyze X’s news and social media data, enhancing betting decisions on political and economic events.

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Bloomberg reported Kalshi aims to use xAI for tailored insights, enabling users to wager on outcomes like Federal Reserve rate changes or elections through derivative contracts.

“There’s deep alignment between prediction markets, social media, and AI. Prediction markets capture what people know — AI scales what people can know,” said Kalshi CEO Tarek Mansour. “This is just the beginning of a long collaboration to unlock the full potential of prediction markets.”

The prediction market industry fits X’s vision to evolve into a comprehensive platform, capitalizing on its trend and news leader role. While xAI’s denial quashes immediate partnership claims, its openness to discussions signals potential interest in prediction markets, where AI could amplify real-time insights.

xAI’s cautious stance reflects its focus on strategic AI development while navigating speculative buzz. As X pursues its “everything app” ambition, prediction markets could enhance its ecosystem, blending social media’s pulse with AI-driven analytics. With no partnerships confirmed, xAI’s future moves may yet redefine how users engage with event-based predictions, positioning it at the forefront of AI innovation.

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Tesla welcomes Chipotle President Jack Hartung to its Board of Directors

Tesla announced the addition of its new director in a post on social media platform X.

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Credit: @ArthurFromX/X

Tesla has welcomed Chipotle president Jack Hartung to its Board of Directors. Hartung will officially start his tenure at the electric vehicle maker on June 1, 2025.

Tesla announced the addition of its new director in a post on social media platform X.

Jack Hartung’s Role

With Hartung’s addition, the Tesla Board will now have nine members. It’s been a while since the company added a new director. Prior to Hartung, the last addition to the Tesla Board was Airbnb co-founder Joe Gebbia back in 2022. As noted in a Reuters report, Hartung will serve on the Tesla Board’s audit committee. He will also retire from his position as president and chief strategy officer at Chipotle, and transition into a senior advisor’s role at the restaurant chain, next month.

Hartung has had a long career in the Mexican grill, joining Chipotle in 2002. He held several positions in the company, most recently serving as Chipotle’s President and Chief Strategy Officer. Tesla highlighted Hartung’s accomplishments in a post on its official account on X.

“Over the past 20+ years under Jack’s financial leadership, Chipotle has seen significant growth with over 3,700 restaurants today across the United States, Canada, the United Kingdom, France, Germany, Kuwait and the United Arab Emirates. Jack was named ‘CFO of the Year’ by Orange County Business Journal and Best CFO in the restaurant category by Institutional Investor,” Tesla wrote in its post on X.

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Tesla Board and Musk

Tesla is a controversial company with a controversial CEO, so it is no surprise that the Board of Directors tend to get flak as well. Two weeks ago, for example, Tesla Board Chair Robyn Denholm slammed The Wall Street Journal for publishing an article alleging that company directors had considered a search for a potential successor to Elon Musk. Denholm herself has also been criticized for offloading her TSLA shares.

More recently, news emerged suggesting that the Tesla Board of Directors had formed a special committee aimed at exploring a new pay package for CEO Elon Musk. The committee is reportedly comprised of Tesla board Chair Robyn Denholm and independent director Kathleen Wilson-Thompson, and they would be exploring alternative compensation methods for Musk’s contributions to the company.

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Rivian stock rises as analysts boost price targets post Q1 earnings

Rivian impressed with smaller-than-expected losses & strong revenue, pushing analysts to raise price targets.

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(Credit: Rivian)

Rivian stock is gaining traction as Wall Street analysts raise price targets following the electric vehicle (EV) maker’s first-quarter earnings report. Despite a dip after the announcement, optimism surrounds Rivian’s cost control and upcoming lower-priced cars.

Last week, Rivian reported a better-than-expected Q1 gross profit, surpassing Wall Street’s forecasts with adjusted losses of $0.48 per share against expectations of $0.92 per share. The company also reported a revenue of $1.24 billion compared to the $1.01 billion anticipated.

However, the EV automaker cut its 2025 delivery forecast and capital spending due to President Donald Trump’s tariffs. It explained that it is “not immune to the impacts of the global trade and economic environment.” RIVN stock dropped nearly 6% post-earnings, closing at $12.72 per share.

Wall Street remains upbeat about Rivian, citing progress toward launching lower-priced vehicles in 2026 and effective cost management. On Monday, Stifel analyst Stephen Gengaro raised his RIVN price target to $18 from $16, maintaining a “Buy” rating. He highlighted Rivian’s “solid progress” toward key milestones.

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Conversely, Bernstein’s Daniel Roeska gave RIVN a “Sell” rating. However, Roeska also lifted his Rivian price target to $7.05 from $6.10, acknowledging “better” Q1 results. He warned that profitability remains distant and hinges on multiple product launches by the decade’s end.

Overall, Wall Street’s average price target for RIVN climbed from $14.18 to $14.31, a modest 13-cent increase reflecting positive sentiment. About one-third of analysts covering Rivian rate it a Buy, compared to the S&P 500’s average Buy-rating ratio of 55%.

On Monday, Rivian stock rose 2.7% to $14.64, slightly trailing the S&P 500 and Dow Jones Industrial Average, which gained 3.3% and 2.8%, respectively. The uptick may also stem from broader market gains tied to news of a temporary U.S.-China tariff suspension.

As Rivian navigates trade challenges and scales production at its Illinois factory, its Q1 performance and analyst support signal resilience. With lower-priced EVs on the horizon, Rivian’s strategic moves could bolster its position in the competitive EV market, offering investors cautious optimism for long-term growth.

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