What would happen to the world oil and gas market if Green cars were mass produced and what effect would it have on companies in that industry?

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Well, the theoretical effect would be that the price of oil would lower as supply increased and demand decreased (which is what happened with the onset of the recent recession), but the overall and real impact of making the majority of the world's cars either more efficient or gasoline-free is hard to say.

Remember that only about 50% of the oil that is pumped out of the ground is used for transportation fuel, with the rest going for a wide variety of products from plastics to cosmetics. (follow link for more complete list)

The companies you're referring to are huge and very profitable, so it stands to reason that they would resist a move towards fuel efficiency or alternative fuels.  Their other option, which they are fully capable of, is to embrace green technology and become the major innovator and supplier of it, which would make them more, not less profitable.

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Assuming that all the green cars put together would consume less gas than all the regular cars that now exist, the world price and quantity produced of oil and gasoline would go down.  Firms in that industry would, at the least, have lower profits.  Some might even go out of business.

The price and quantity produced of gas would have to go down because the demand for gas would fall.  Economic supply and demand analysis says that when demand for something falls, all other things being equal, the price of that product must fall.

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