Cathay Haitong: Oil prices boost overseas NEV demand, optimistic about domestic independent brands going global

Guotai Haitong released a research report stating that the conflict between Iran and the United States drives up global oil prices, and that under the current oil price cycle, the economic advantages of HEV, PHEV, and BEV will expand further. This could help increase their penetration rates in regions with high oil prices, and may create export opportunities for independent brands. According to data from the China Association of Automobile Manufacturers, in January–February 2026, China’s passenger car export volume rose 53.3% year over year, while the export volume of new energy vehicles grew by roughly 110% year over year. With global oil prices staying high as a catalyst in March, the full-year outlook for new energy exports may be raised. The report recommends core overseas-α stocks among independent brands: Geely Automobile (00175), SAIC Group (600104.SH), BYD (01211), XPeng Motors-W (09868), and Leapmotor (09863).

Guotai Haitong’s main viewpoints are as follows:

Event: On February 28, 2026, the U.S. and Israel carried out large-scale military action against Iran. Iran announced the blockade of the Strait of Hormuz, which basically halted oil exports from the Gulf, pushing global crude oil prices sharply higher.

The military conflict between the U.S. and Iran drives up global oil prices, and historical oil price increases create opportunities for the passenger car industry

According to IEA estimates, in March, global crude oil supply may be reduced by 8 million barrels per day (18.5% of the OPEC+ production in February), far exceeding the demand reduction of 1 million barrels per day. On March 23, the Brent spot price rose 54.1% versus the average in February. As a result, in the first and second weeks of March, global gasoline spot prices increased by 24.3% and 33.7% month over month, respectively. Over the past two weeks, the EU’s untaxed price of Euro 95 unleaded gasoline increased 12.4%/6.6% month over month, the taxed price increased 6.6%/3.6% month over month, and in Malaysia the price of Euro 95 gasoline increased 3.1%/22.5% month over month.

Looking back at history, the first oil crisis broke out in 1973. Crude oil prices surged by nearly 4 times. Japanese brands with higher fuel efficiency and more lightweight designs—Toyota and Honda—penetrated the U.S. rapidly, replacing popular large-displacement muscle cars.

When the second oil crisis broke out from 1978 to 1980, crude oil prices rose by more than 200%. Japanese cars’ penetration in the U.S. further increased from 12% to 21%. In 1990, the Gulf War triggered the third oil crisis. Then factors such as strong oil demand from 2000 to 2008, political instability in the Middle East, and a sharp depreciation of the U.S. dollar drove cumulative oil price increases to reach 4 times. In 1997, Toyota launched the Prius, the world’s first mass-produced hybrid passenger car. In 2000, it entered the U.S. and European markets. In 2003, it released a second-generation model with fuel consumption per 100 km of just 2.82 L. Leveraging its fuel-efficiency advantage, Toyota’s global cumulative sales of hybrid models reached the 1/2/3 million milestones in May 2007, September 2009, and February 2011 respectively, ushering in the “Toyota moment.”

This round of oil price increases highlights NEV value-for-money, and the overseas penetration space remains broad

Taking EU countries as an example, for gasoline cars with fuel consumption per 100 km of 5.5–8.5 L, after oil prices rise, the fuel cost increases by 115–178 euros per 10,000 kilometers compared with the February average. Comparing SUVs in the same class—Honda Insight 240TURBO two-wheel-drive Luxury Edition, Honda Insight 2.0? (HEV) two-wheel-drive Luxury Edition, Song pro DM 220KM Superiority Edition, and the Maxus e-something? 05 EV 520KM Zhihang Edition—in line with the latest European average gasoline prices and public fast-charging pile prices, the estimated energy replenishment costs are approximately 1344/1009/993/686 euros per 10,000 kilometers, respectively. The corresponding cost ratios of replenishment between gasoline cars and HEV, PHEV, and BEV are 1.3/1.4/2.0.

According to data from the Passenger Car Association, by 2025, the global NEV penetration rate is 23.6%. The NEV penetration rates in Europe, North America (excluding the U.S.), Asia (excluding Japan and South Korea), and the Southern Hemisphere are 23.4%/8.5%/6.9%/4.7%, respectively. The shares of China’s independent-brand NEVs in those local markets are 12.2%/6.1%/44.0%/76.8%, accounting for 2.9%/0.5%/3.0%/3.6% of local passenger car sales, respectively—still leaving obvious room for improvement.

Risk warning

Changes in the geopolitical landscape, and changes in overseas new energy and import policies.

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