Bullets:

Over 70% of the world’s electric vehicle batteries are made by Chinese companies, who enjoy monopolistic advantages in raw materials sourcing and cost.

With the Persian Gulf closed by Iranian forces, energy prices are skyrocketing across the world. Economies that are dependent on smooth traffic flows from the Middle East are especially vulnerable to shutting down, just weeks after such closures.

The same impact is felt at the household and small business level, as pumps are running dry and gasoline is rationed.

China’s EV revolution will be exported to markets in Asia, Africa, and Europe, and displace fossil fuel-burning vehicles.

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Report:

Good morning.

The newest war in the Middle East, and the closure of the Persian Gulf to most of the ships full of crude oil, have made some things painfully plain.

At the national level, countries who are reliant on energy from the Middle East are vulnerable, and their economies are always just weeks away from shutting down if those exports stop. And at the household level, it’s now clear what it means to buy a car that runs on regular gasoline: a commitment to years of buying gasoline at prices in the future that are unknowable, assuming it can be bought at all. Same for businesses, who buy cars and trucks.

That logically points to only one direction. Unless you’re living in a country that is self-sufficient for oil and gas—and there aren’t many of those—the decision to buy a gas-powered car or an electric vehicle is now a question of whether you’ll have transportation at all. Electric cars are going to take over automobile markets, and China builds most of those, and have monopolies over the supply chains for the manufacturing of EV batteries.

In 2024, 17 million EV’s were built, and most of that was due to the growth of China’s industry. Over twelve million of that seventeen were built for the Chinese market. And that’s a function on the supply side on China’s domination of the battery manufacturing, which is more than 70% of the global total.

This was published on 1 March, and just four weeks later is already ancient history. We’re living on a different planet now. Because in that time Brent crude, the world benchmark, went from $71 a barrel, to now jerking back and forth between $110 and $120. Chinese companies are setting up factories and quickly scaling up production across Southeast Asia. BYD, Chery, Geely and others are building EV’s in local markets across Asia, investing billions of dollars. Some local officials there were concerned that Chinese carmakers are bringing in their own suppliers, instead of training local ones. The tech transfer that some local companies were hoping for isn’t happening.

That probably was a concern in Thailand and Cambodia and Vietnam, last month. Today the concern in Southeast Asia is that they can’t get gasoline at all, and need all the Chinese EV’s they can get, and so much the better if they come from a factory in-country.

This is a chart of China’s share of Electric Vehicle sales across the world, with the percentage on the left-hand side. On the right is the number of vehicles sold in that market. Except for Mexico, and the US on the very bottom, every single car buyer in every single country there has no idea if he will be able to buy gasoline at all two months from now, but does know that it won’t be at the prices he used to get.

Lots of countries there are European, and don’t forget that just a few months ago officials from the European Union were flying over to Beijing, complaining about Chinese “overcapacity”. That was ancient history too. Because now they need Chinese factories to be building all the electric-powered vehicles and equipment they can. The Strait of Hormuz is shut down to everyone except Iran’s friends, and that means demand for internal combustion engine cars will go away too, and the Chinese have the only factories that can scale up to make new EV’s fast enough for everybody.

Resources and links:
CHART: China’s global electric car dominance
https://www.adamasintel.com/charts-china-global-electric-car-dominance/

China’s EV battery makers widen lead to over 70% global share
https://asia.nikkei.com/business/automobiles/electric-vehicles/china-s-ev-battery-makers-widen-lead-to-over-70-global-share

What’s Behind China’s 70% Global Share of EV Batteries?
https://medium.com/@impactnews-wire/whats-behind-china-s-70-global-share-of-ev-batteries-4c1e0ce8ed29

Where Chinese EVs Are Selling the Most Worldwide
https://www.visualcapitalist.com/where-chinese-evs-are-selling-the-most-worldwide/

EU Chief Demands China Address Trade Imbalance as Tensions Flare
https://www.bloomberg.com/news/articles/2025-07-08/eu-chief-demands-china-address-trade-imbalance-as-tensions-flare

Ship Traffic in the Strait of Hormuz Has Virtually Stopped
https://www.statista.com/chart/35984/ship-traffic-in-the-strait-of-hormuz

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