Chinese battery giants gain $70 billion as oil shock boosts EV demand

11:00

By: Dakir Madiha

Chinese battery giants gain $70 billion as oil shock boosts EV demand

China’s leading battery manufacturers have added more than 70 billion dollars in combined market value since the start of military strikes on Iran, as investors shift toward companies expected to benefit from rising oil prices and accelerated electric vehicle adoption.

Shares of CATL, BYD, and Eve Energy have outperformed major oil companies in recent weeks, reflecting a change in how markets interpret energy disruptions. Crude prices surged above 100 dollars per barrel, with Brent reaching nearly 119.50 dollars earlier this month after the conflict led to the effective closure of the Strait of Hormuz, a key route for roughly 20 percent of global oil supply.

The rally highlights China’s dominant position in the electric vehicle battery sector. Data from SNE Research shows CATL held 39.2 percent of the global market in 2025 with 464.7 GWh installed capacity, while BYD ranked second with 16.4 percent and 194.8 GWh. Chinese manufacturers accounted for about 69 percent of global EV battery capacity last year.

Rising fuel costs are already influencing consumer behavior in parts of Asia. At a BYD dealership in Manila, sales staff reported a sharp increase in demand, with customers placing a month’s worth of orders in just two weeks. The shift reflects growing interest in electric vehicles as drivers seek alternatives to higher fuel expenses.

The surge in Chinese battery stocks contrasts with setbacks among Western automakers. Ford, General Motors, and Stellantis have recorded a combined 53 billion dollars in electric vehicle related write downs since late 2025. Ford reported a 19.5 billion dollar charge linked to the cancellation of its F 150 Lightning program, while General Motors and Stellantis posted losses of 7.6 billion and around 26 billion dollars respectively.

Analysts say the divergence reflects structural differences in investment strategy. China has committed significant capital to clean energy development, investing around 1 trillion dollars in 2025 alone. Researchers note that while the country remains dependent on Middle Eastern oil, it has also built a supply chain that positions it to benefit from long term shifts in energy demand.

The International Energy Agency now expects China’s oil demand to peak by 2027, earlier than previously forecast, as electric vehicles account for more than half of new car sales in the country. Battery manufacturers are also expanding beyond automotive markets. CATL reported a 42 percent increase in net profit for 2025, driven in part by growing demand for energy storage systems linked to power grids and data centers.

The broader market question remains whether the current oil price shock will be temporary or will accelerate a lasting transition toward electrification. For now, investors are increasingly favoring companies tied to battery production, reinforcing China’s position at the center of the global energy transition.