The oil crisis of the 1970s brought about the glory of Japanese fuel vehicles, so will 2026 be the turning point for Chinese electric vehicles?

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Oil prices are soaring, the Strait of Hormuz is obstructed, and an energy shock is reshaping the global automotive market. The echoes of history are clear: the 1973 oil crisis gave rise to Japanese cars, and the crisis of 2026 may become a turning point for Chinese electric vehicles to take over the global market.

On March 19, Brent crude oil surged to $112 per barrel during trading, approaching historic highs. This round of energy shock is accelerating the pace of consumers shifting to electric cars—its logic is very similar to the way the 1973 OPEC oil embargo reshaped the automotive market. Analysts point out that, amid gradually loosening Western tariff barriers and the opening of markets in Australia, Canada, and Europe, Chinese electric vehicle brands are expected to achieve exponential expansion in global markets by capitalizing on this energy turmoil.

For ordinary consumers, the shock is already palpable. According to analysis, if oil prices remain above $100 per barrel, the cost advantage of electric cars will become increasingly evident—average monthly expenses for driving a gasoline car in Europe are about 140 euros, while an electric car only costs 65 euros. This price difference is pushing more and more hesitant buyers toward a critical purchasing decision.

The Hormuz Crisis—Trigger of the Supply Shock

The immediate trigger for this round of soaring oil prices is the escalating military conflict in the Gulf region. Since February 28, the US and Israel have launched airstrikes against Iran, targeting Iran's most important oil export hub, Kharg Island, and Pars gas facilities. Iran immediately retaliated by blocking the Strait of Hormuz and attacking oil and gas facilities in neighboring Gulf countries.

The Strait of Hormuz carries about 20% of the world’s oil trade flow; its blockade caused a supply disruption described by the industry as the most severe in recent years, with pain reminiscent of 1973. Brent crude was quoted at $112 per barrel on March 19, not far from the intraday historical peak of $147.50 set in 2008.

The instability of energy supply is spreading to broader economic fields. Analysts point out that high oil prices will drive up costs across the entire chain from food to fertilizer, exacerbating inflationary pressure and forcing governments to reassess their energy security strategies.

Lessons from the Rise of Japanese Cars

The history of 1973 provides the most persuasive reference frame.

At that time, the Middle Eastern oil embargo caused oil prices to quadruple in a short period, and American consumers quickly abandoned Detroit’s large-displacement cars in favor of fuel-efficient Japanese compact cars like the Honda Civic, Toyota Corolla, and Nissan-Datsun.

Data confirms the depth and speed of this shift: Japanese cars’ market share in the US jumped from about 9% in 1976 to 21% in 1980, and the overall share of imported cars reached 28% by the end of the 1980s.

Meanwhile, the American Big Three car companies suffered heavy setbacks—General Motors’ sales dropped 34%, Ford’s declined even more at 47%, and they were forced to hurriedly transition to compact models but had already missed the opportunity.

Analysts believe that the dynamics in 2026 are highly similar to 1973, and could even be more dramatic—the difference is that this time, the substitute is the electric vehicle, and the disruptor is China.

Chinese Electric Cars: The Advantage of Zero Fuel Cost

In this round of energy shock, the competitive advantage of Chinese electric vehicle brands is being magnified.

Brands such as BYD, NIO, Zeekr, Geely, and Chery, relying on zero fuel operating costs, lower lifecycle expenses, advanced technical features, and aggressive pricing strategies, have created a distinctive competitive edge in a market environment of high oil prices.

Market data already shows obvious signs of shifting demand. Edmunds data shows that the proportion of consumer searches for electrified models jumped from 20.7% to 22.4% at the beginning of March, reappearing the peak trend seen during the oil price shock of 2022.

CarGurus and many industry analysts also point out that each sustained oil price surge increases the attention to hybrid and pure electric vehicles—hybrids absorb the first wave of demand, while pure EVs see larger scale conversion 3–6 months later as consumers' cost calculations become clear.

China’s own market transition is also a forward-looking reference. Currently, over 50% of new car sales in China are electric or plug-in hybrid models, oil demand has declined year-on-year for two consecutive years, effectively avoiding the energy shock other countries are experiencing.

Industry data show that in 2025, cumulative global EV oil displacement reaches 1.7 million barrels per day, equivalent to 70% of Iran’s exports, saving importing countries about $600 billion in potential energy expenditure each year.

Demand Peak Ahead of Schedule: Deep Reshaping of the Energy Landscape

The far-reaching impact of this crisis may go far beyond shifts in short-term market share.

The International Energy Agency (IEA) previously predicted that global oil demand would peak in 2029, but the protracted Hormuz crisis may significantly advance this timeline.

Under the pressure of energy security, the electrification process of corporate fleets will clearly accelerate in all countries, and China’s EV exports are likely to see explosive growth in markets with loosening tariff barriers. China’s concurrent advancement of sodium-ion battery mass production also offers an alternative to lithium batteries for transportation and large-scale energy storage, further strengthening its comprehensive competitiveness in the new energy industry chain.

Analysts summarize this outlook as: just as Japanese car makers historically surpassed the US auto industry during the 1970s energy crisis, Chinese new energy vehicle makers now stand at a similar historical juncture—energy shock may become the strongest catalyst for reshaping their global market presence.

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