High Oil Prices Bring Opportunities in Crisis: Can China's Auto Industry Seize Them?

Introduction

History always cycles, though the protagonists differ. Half a century ago, a petroleum crisis allowed Japanese cars, known for fuel efficiency and durability, to rise on the momentum and reshape the global automotive landscape. Half a century later, the script is strikingly similar: geopolitical conflicts disrupt energy supply, oil prices remain high. Now, standing at the center of the stage are China's new energy vehicles, holding a complete industrial chain and breaking through technologically in all aspects.

With the continuous development of new energy technology, application scenarios and capabilities are becoming wider and stronger. (Photo - Sun Wenjian)

01. Chinese Electric Vehicles Welcome New Opportunities

Early this summer, from the British Isles to the US West Coast, the author was repeatedly asked by locals, academics, and industry professionals: "Is it actually easy to drive new energy vehicles? How did China promote them?" Regardless of nationality or social class, the desire for low-cost mobility is felt worldwide.

What stirs all this is just two words: Oil Prices. Over the past six months, global refined oil prices have cumulatively risen by more than 30%. The shock to the supply side has not eased, and cost pressure is being transmitted to every ordinary user. Scott, a business consultant living in London, confessed to the author: "Sustained geopolitical conflicts directly drive up household energy and vehicle bills. The cost of using fuel vehicles has become a real pain point for Western families."

It's not just cars. Based on automotive supply chains, Chinese automakers are starting to manufacture robots. (Photo - Sun Wenjian)

According to the International Energy Agency (IEA) report, due to the situation in the Middle East, global oil supply decreased by an average of 3.9 million barrels per day. The Brent crude oil average price in April was $120.36 / barrel, a surge exceeding 62%. Financial institutions judge: High oil prices will become a medium-term norm; the era of cheap oil is hard to return to.

Europe, which once took the lead in setting targets for banning fuel vehicle sales, previously saw slow progress in electrification transformation due to lagging infrastructure, high costs, and conservative consumer concepts. However, the continuous impact of high oil prices is breaking this deadlock, turning electrification from a "policy option" into a "market necessity".

The Delivan brand, making its debut in Europe, designed for UK standards, has over 6,000 data collection points on the whole vehicle. (Photo - Li Xiyan)

This scene is so similar to the oil crisis of the 1970s: Back then, oil prices soared, completely crushing the dominance of American large-displacement fuel vehicles. Japanese small cars rose on the momentum with fuel-saving advantages, completing a global layout. But unlike the single product advantage of Japanese cars back then, the rise of China's new energy vehicles relies on the synergistic advantage of a closed-loop industrial chain, controllable autonomous technology, and comprehensive scenario coverage. Its foundation is steadier, barriers are deeper, and vitality is stronger.

For ordinary consumers, electric vehicles are the optimal solution for compressing vehicle usage costs. For the country, it is a strategic tool to reduce reliance on foreign oil and ensure energy security. For the industry, it is the core breakthrough for China's automotive sector to overtake on a new track and achieve global leadership. Under high oil prices, the consumption value, strategic value, and industrial value of China's new energy vehicles are becoming increasingly significant.

02. When Low Oil Prices Are No Longer Eternal

Before this round of significant oil price increases, the vast majority of global markets took for granted a premise: the convenience of fuel vehicles is irreplaceable, and promoting electric vehicles is not a must. But everyone ignored that this "stability" was built on a fragile balance of sufficient oil supply and low prices.

Malaysia's oil import dependence rose from 19% to 32% in 2024, causing a sharp increase in fiscal subsidy pressure; Thailand's net energy imports are expected to account for 5.5% of GDP in 2025, with the economy highly dependent on oil; Chile relies on energy imports; high oil prices have severely hit copper mine mining and transportation.

Oil prices rose by more than 30% within half a year, making the increasingly heavy bill a real pain point for ordinary families. (Photo - Li Xiyan)

Long-term oil price subsidies have continuously squeezed public fiscal expenditures such as education, healthcare, and infrastructure. Once geopolitical conflicts break the original balance, the cost of maintaining low oil prices has become unsustainable. For ordinary consumers, when the cost of filling a tank continues to rise, shifting to more economical and stable electrified mobility becomes a natural choice.

Before this, long-term stable oil prices gave governments little motivation to invest in new electrification infrastructure like charging pile construction and grid expansion. Now, "investing funds in electrification future is better than fuel subsidies" has become a policy consensus for more and more countries.

When the author communicated with energy and public policy experts at the University of Oxford, scholars focused on China's new energy promotion path: Are subsidies for consumers or enterprises? How to solve the lack of charging piles? Vehicle reliability and residual value?

Buildings hundreds of years old, narrow roads, old power grids were once reasons hindering many countries from choosing electric vehicles. (Photo - Li Xiyan)

Changes on the demand side are also clear. The vehicle usage anxiety spawned by high oil prices has become a hot topic on global social platforms. Young consumer groups' acceptance of new energy and intelligent mobility has increased significantly, opening the most critical market entry for China's new energy vehicles.

Gary Miller, former Lord Mayor of Liverpool, told the author: "When I attended the Shanghai Auto Show three years ago, I was already impressed by the product power of China's new energy vehicles. Unfortunately, I couldn't buy a desired model back then. Now, watching China's new energy vehicles go global, I have gradually waited for a mature opportunity to buy a car."

A global reconstruction of transportation driven by high oil prices is quietly happening. China's new energy vehicles, standing at the center of the wave, not only caught the trend but also, relying on hard power, became the definers of the trend.

03. From Following to Leading

The new normal of high oil prices brought by the Middle East situation has become the strongest catalyst for China's new energy vehicles accelerating overseas expansion. Zhu Jiangming, founder of Leapmotor, frankly told the author: "Global crude oil supply tension has directly boosted the market demand for electric vehicles. The company's overseas exports in the first quarter of this year far exceeded expectations, and we are confident in completing an export target of 150,000 units for the full year."

In 2025, China's automobile exports reached 7.098 million units, among which new energy vehicle exports reached 2.615 million units, a year-on-year surge of 103.7%, achieving high-quality overseas expansion with increased volume and value. From autonomous and controllable battery, motor, and electronic control systems, to comprehensive leadership in smart cockpits and advanced assisted driving, China's new energy vehicles have completed the transition from "following" to "leading," Models like BYD ATTO 3 and SAIC MG4 EV have successively become blockbuster products in multiple global markets.

It's not just on the ground. Through flying cars, Chinese automakers are beginning to layout a broader transportation space. (Photo - Li Xiyan)

In the hybrid track once monopolized by Japanese brands for a long time, Chinese brands have achieved a thorough overtake. Ren Xiangfei, Chief Engineering Technical Scientist of Geely Automobile Group, explained to the author using Geely i-HEV Zhiqing hybrid as an example: "Unlike the Japanese power split route of 'fuel car plus electricity', China's hybrid focuses on drive as the core, where the motor and engine can decouple and work independently, balancing ultimate energy saving with powerful dynamics, completely breaking the Japanese technological monopoly lasting for decades."

Zhao Fucheng, CTO of HaoSi Power, told the author: "Chinese enterprises have achieved global leadership in motor efficiency, battery cost control, and thermal efficiency management. Combined with internet of vehicles and AI energy management systems, they can provide users with a 'personalized' intelligent driving experience."

Currently, mainstream Chinese automakers like Geely, Changan, and Chery have all launched independently developed high-efficiency hybrid solutions. Fuel consumption and thermal efficiency performance remain firmly in the global first tier.

From components to complete vehicles, China's advantages are becoming increasingly significant. (Photo - Li Xiyan)

Volkswagen China Executive Vice President and CARIAD China CEO Han Sichu straight said, "The Chinese market has become the global innovation center for smart electrification. The competition rhythm of global new energy vehicles is being defined by China. Transnational automakers must establish core R&D and operational capabilities in China to seize this era's opportunity."

Now, more and more foreign brands are actively carrying out deep strategic cooperation with Chinese automakers: Leapmotor partners with Stellantis, relying on Chinese technology to leverage global channels; Dongfeng and Stellantis jointly produce new energy models for Jeep and Peugeot brands, supplying the global market. Chinese technology, Chinese standards, and Chinese solutions are becoming the mainstream choice for global automotive electrification transformation.

Chinese supply chain vehicles holding core technology have opened up broader global cooperation. The image shows the skateboard chassis created by Times Intelligent. (Photo - Li Xiyan)

As a leading global power battery enterprise, CATL's voice is getting louder and louder, at the previous Beijing Auto Show, launched five new battery products at once, including a new charging network; Almost at the same time, announced mass production cooperation with local Turkish electric vehicle Togg on the 'Rock Solid' chassis.

It's not just market share at the production end; CATL is also guiding global standards for the industrial chain, such as the carbon neutrality issue that all power battery enterprises are extremely concerned about. CATL has given its own solution.

What is rare is that from 2022 to 2025, industry demand exploded, and CATL's theoretical carbon emission total in core operations more than doubled. By common sense, capacity expansion and emission increase are inevitable laws. But CATL ultimately achieved net zero in core operations through engineering means. Carbon emission intensity per unit product decreased by about 77% compared to 2022, and unit energy consumption dropped to half of the industry average level.

Achieving carbon neutrality while business grows at a high speed proves that green and development can be completely achieved together.

From breaking through at a single point to leading the entire industrial chain, China's new energy vehicles, relying on this hardcore confidence, have found their footing in the turbulent times of high oil prices.

04. How to Break the Market Share Ceiling?

Behind the high-speed growth, there are hidden concerns—the current high-speed growth of automobile exports may encounter a bottleneck soon.

Based on the advantages of the complete industrial chain, some car brands have targeted overseas since their inception. (Photo - Li Xiyan)

There is a natural ceiling of about 25% for the overseas market share of a single country brand. Roland Berger, after reviewing the history of the global automotive industry over the past century, estimated that in 2030, Chinese automakers' overseas sales could reach 7.5 to 10 million units, with market share between 15% and 20%.

Chinese automakers' globalization is mostly in the transition stage from assembly production to local operation. Insufficient localization leads to unsustainable cost advantages, fragile supply chains, and weak brands, becoming a core bottleneck.

New energy vehicles have become the core of incremental growth in China's automobile exports. (Photo: Xinhua Publishing House)

The past light-asset agency model has exposed numerous hidden dangers: stockpiling goods for volume, lack of terminal control, absent after-sales services, which will eventually overdraw brand reputation and miss market dividends. In this round of going overseas, Chinese automakers must take the long route of high-quality localization.

For this, Roland Berger Global Senior Partner Zheng Yun judges that in the next one to two years, China's automobile exports may enter a brief platform period. The key to breakthrough lies in completely shifting from "Made in China" to "Global Operation".

Relying on the synergistic advantages of a complete industrial chain closed loop, controllable autonomous technology, and comprehensive scenario coverage, China's new energy vehicles are starting to rise globally. (Photo - Li Xiyan)

Geely reached deep cooperation with Proton in Malaysia and built a joint venture factory in Brazil, relying on local resources to achieve a dual rooting of industrial chain and brand; In April, in Birmingham, UK commercial vehicles, Chery Commercial Vehicles' new brand DELIVAN landed in Europe. DELIVAN CEO Yang Junling told the author: "The company implements the model of 'UK definition, German engineering, European standards, local operation', builds local R&D and operation teams, creates a cross-border ambassador matrix, resonates with the European market with green concepts, abandons low-price competition, and builds high-end brand barriers with trust and localization."

Chinese technology, cross-national design, global products, such operations are becoming increasingly common. (Photo - Li Xiyan)

Conclusion

History rhymes, but will not simply repeat. The oil crisis 50 years ago achieved the glory of Japanese cars; now high oil prices are achieving China's new energy vehicles. This is not an accidental trend, but the inevitability of China's automobiles deep cultivation for decades.

Text by | Li Xiyan • Huasheng

Editor | Heisong