Tesla True Believer Jim Cramer Explains Why Fossil Fuel Stocks are History


Tesla (NASDAQ: TSLA) true believer Jim Cramer may have just admitted that fossil fuel stocks are on their last legs. His bleak forecast of the future of fossil fuel stocks came after Exxon Mobil's (XOM) shares dropped 2.6 percent after Goldman Sachs downgraded the company's rating to a "Sell."

Based on Jim Cramer’s forecast, Exxon’s decline revealed how much of a factor sustainability was when it comes to trading in the currently-changing market. As a result, new energy stocks, like Tesla, could continue to rise.

“I’m not about making friends, I am about making money. And I don’t think I can help you make money in the oil and gas stocks anymore,” wrote Jim Cramer in an article published on The Street. He declared his lack of faith in oil and gas stocks after Exxon dropped 2.6 percent, marking it the thirteenth time XOM fell in just fourteen days. 

Exxon stocks' latest drop may have been prompted by Goldman Sachs analyst Neil Mehta, who changed his rating on XOM from "Neutral" to "Sell." Mehta also reduced his price target for the stock from $72 to $59, reported Market Watch. Exxon was labeled one of the most publicly traded international oil and gas companies in the world.

Inversely, clean energy company TSLA has skyrocketed up, while XOM has continued to fall--although there is no direct correlation between the two. As of yesterday, Tesla stock was priced at $780 per share at the market close. Jim Cramer explained XOM's decline and TSLA rise in his latest article for The Street. He called it "impact per share" and referred to the social issues a money manager might keep in mind when thinking of investing or divesting a stock. 

TSLA would be an excellent example of a stock that is in line with social issues new managers support, namely because sustainability has become such a crucial factor in investing today. One of the most significant social issues among this new generation of money managers is sustainability.

However, sustainability isn’t just supported by the up and coming youthful money manager. To prove this point, Jim Cramer mentioned Larry Fink, the CEO of BlackRock (BLK). 

Fink announced that the BlackRock would make sustainability integral in its portfolio construction and risk management in a letter to clients. According to Jim Cramer, Fink also said that BlackRock would divest any company making more than 25 percent of its revenue from thermal coal. 

BlackRock is one of the largest money managers on Earth, said Cramer. So for Fink to openly declare that sustainability matter when deciding on a stock was a notable statement. 

In an interview with The Street, Jim Cramer said that companies like Exxon might have a difficult time reducing its carbon footprint. It will likely have a hard time finding ways to contribute to the sustainability movement because of its intrinsic qualities.

In the end, Cramer predicted that “If these stocks go up, it’s an opportunity to leave them and reposition.” This may mean that new energy stocks, like TSLA, will continue to rise, while fossil fuel stocks, like XOM, slowly fade into history.

Featured Image Credit: The Street/Twitter

Follow me on Twitter: @PurplePanda88

About the Author

Claribelle Deveza

Claribelle Deveza

Longtime writer and news/book editor. Writing about Tesla allows me to contribute something good to the world, while doing something I love.

Follow me on X

Reading next

NASA plans to add a 'Space Hotel' to the International Space Station for Tourists

Tesla Accessories