Oil prices soared more than 9% on Wednesday after OPEC, the cartel of oil-producing nations, said it will cut production. If oil keeps going up, prices will inevitably rise at the pump too, where gas now costs an average $2.14 a gallon.
A shock at the pump could make people want to give up their gas guzzlers, but don’t expect this latest rise in gas prices to help electric car maker Tesla Motors, at least in the near term. The high-income group buying the company’s $75,000 sedans are not impacted by high gas prices, and delivery of its lower-priced car, the Model 3, is still months, if not years, off.
Tesla shares have fallen since oil prices started dropping in mid-2014, and Tesla CEO Elon Musk has warned that low gas prices could make it less attractive to buy an electric car. But it’s hard to draw a direct connection, because the stock trades based on other factors like the pace of Tesla’s auto production.
Tesla shares have fallen 21% this year.