Global oil prices skyrocket — will China's electric vehicles be the biggest winners?

Oil shock and domestic impact

A surge in Middle East tensions and reported disruptions to shipping through the Strait of Hormuz have sent crude, natural gas and refined-fuel prices sharply higher, with Brent and WTI each up more than 35% versus pre‑conflict levels. Domestic fuel costs in China have already moved: it has been reported that the National Development and Reform Commission approved a retail petrol and diesel increase of roughly ¥0.87 and ¥0.95 per litre respectively, pushing 95‑octane petrol into the “¥9 per litre” era in Beijing and triggering long queues at filling stations as consumers tried to top up before the window closed.

Chinese EVs positioned to benefit

Higher fuel prices are reshaping consumer calculus. Historically, oil shocks boosted demand for more fuel‑efficient cars; this time the likely beneficiaries are Chinese new‑energy vehicle (NEV) makers such as BYD (比亚迪), SAIC (上汽集团), GAC (广汽), Changan (长安), Chery (奇瑞), XPeng (小鹏) and Leapmotor (零跑). It has been reported that consumer interest has flipped back toward EVs: the China Passenger Car Association (乘联会) recorded NEV penetration of 38.6% in January and 44.9% in February (below 2025’s 54% average), but estimated March retail figures show a rebound — roughly 1.7 million passenger‑car retail sales for the month with NEVs accounting for about 52.9%. The association’s secretary‑general, Cui Dongshu (崔东树), told reporters that sustained high oil prices could reduce monthly fuel‑car sales by about 5% and lift NEV penetration another 2–3 percentage points over time.

Overseas demand and the trade‑risk caveat

Demand signals are also visible abroad. It has been reported that BYD (比亚迪) dealers in Malaysia saw a two‑week order flow approaching a month’s normal level; VinFast showrooms in Hanoi reported foot‑traffic up fourfold and about 250 EV sales in three weeks. Europe and Australia are showing similar trends: February plug‑in and battery EV sales rose strongly in Germany and France, and Jefferies analysts say Chinese brands gained market share, with BYD and SAIC posting large month‑on‑month growth. That said, exporters face headwinds: rising prices for petrochemical inputs, logistics disruption and geopolitical trade frictions can squeeze margins and slow deliveries. Cui warned — and analysts echo — that the energy shock is a long‑term tailwind for China’s EV industry but a short‑term operational and profitability test.

Will this re‑order the global auto hierarchy as the 1970s oil shocks did for Japanese automakers? If high oil prices persist, China’s scale, cost control and integrated supply chain make it the industry’s most likely beneficiary — but geopolitics and supply‑chain stress will determine how fast and how widely the shift happens.