Tesla alone cannot solve climate crisis

Companies and buyers may feel they are doing their part, but only when coal, oil and gas are eliminated from the energy mix can the world breathe easier

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Inside Tesla's Fremont, California, assembly plant. (Russ Mitchell/Los Angeles Times/TNS)

Published: 7:10am, 1 Nov 2021Updated: 7:10am, 1 Nov 2021

Tesla has become the first carmaker to join the elite club of companies with a market value of more than US$1 trillion. The American firm headed by technology entrepreneur Elon Musk has not done that because of enormous sales; its electric vehicles account for less than 1 per cent of global car purchases.

What is driving the enthusiasm of investors is anticipation of the future direction of the industry. With governments planning to phase out fossil fuel-powered cars in coming decades to meet climate change goals, it is an inevitable shift that will benefit everyone, not just stockholders.

The landmark was reached when the Hertz car rental firm announced it would buy 100,000 electric vehicles from Tesla, pushing the share price up by 12 per cent. Tesla is only the sixth company to reach that status, the others being Apple, Microsoft, Saudi Aramco, Google’s parent, Alphabet, and Amazon.

That is telling; all but Saudi Aramco are technology companies and Wall Street views the carmaker in the same light. Its products are, after all, about using technological advances to make travel cleaner, easier and safer.

It helps that governments want to get polluting fossil fuel vehicles off roads to help meet zero-carbon emission targets around the middle of the century. Carmakers are complying, variously setting 2035, 2030 and earlier for all-electric model line-ups.