American and European industries, particularly the car industry, face significant harm as a global energy crisis, linked to the Iran war, is projected to benefit Chinese clean technology industries globally. Gasoline prices are spiking in the U.S. and Europe, directly impacting households.
China is positioned to benefit from these global energy disruptions, which are accelerating a shift away from fossil fuels towards clean technologies and renewable power, sectors China dominates. The Strait of Hormuz, a key source of oil and gas, is now mostly shut, with most of its output previously bound for Asia. Asian nations are now scrambling to conserve energy and bolster dwindling reserves.
China leads the world in exports of batteries, solar products, and electric vehicles, with its industries forecast to see a rise in demand for these renewable products. Before the Iran war began in late February of the current year, China's lead in clean technologies was already lengthening. The U.S. under President Donald Trump had scaled back renewable energy initiatives, promoting its own oil and gas resources to achieve what Trump described as “energy dominance.”
Chinese industry giants, including vehicle-maker BYD and battery-producer CATL, are well-positioned to capitalize on increased interest in low-emissions energy products as the world confronts the perceived fragility of fossil fuels.
Elite Interests and Economic Displacement
Sam Reynolds of the U.S.-based Institute for Energy Economics and Financial Analysis stated that “China’s approach to energy sector development and geopolitics has been completely validated by the Iran conflict.” Reynolds also noted that markets were experiencing a “bifurcation” before the war, with global superpowers advocating for very different energy futures, leaving other nations to choose which approach to support.
This conflict is driving demand for Chinese technology, with exports of items such as solar panels, batteries, and electric cars reaching a record of almost $22.3 billion in December, a 47% increase from the previous year. Much of these exports went to Southeast Asia and Europe, according to the think tank Ember. Investment in renewable power and battery storage, designed to save energy when the sun isn’t shining or the wind isn’t blowing, is expected to increase in nations heavily dependent on energy imports, including European countries, according to the credit rating firm Fitch Ratings.
Investors are betting the war will boost demand for renewables, with CATL and BYD’s Hong Kong traded shares rising roughly 24% and 11%, respectively, in March. Chinese automakers were already expanding EV development and production over the past few years, growing exports faster than American or European rivals by offering cheaper models and gaining ground in regions like Southeast Asia.
Amy Myers Jaffe of New York University’s Center for Global Affairs explicitly stated, “The energy shock is going to help the Chinese industry globally and hurt the American car industry globally.”
National Resistance and Globalist Advance
High U.S. tariffs have largely kept Chinese EVs out of the American market, while rising fuel prices may boost BYD growth within China, according to Chris Liu with the research and advisory firm Omdia. Households facing higher energy costs are likely to transition to clean power, according to James Bowen of the Australia-based consultancy ReMap Research.
Pakistan offers an early example of this shift. Its renewable rollout in the ninth year prior led to more than 50 gigawatts of Chinese solar panels imported by December of the current year. Pakistan still imports a third of its energy, with about 80% of its oil previously flowing through the Strait of Hormuz.
In the United Kingdom, EV leasing demand jumped by more than a third in the first three weeks of March compared to a similar period in February before the war, as reported by Octopus Energy, a renewable group. Octopus also reported increases in rooftop solar sales and solar-related inquiries. Even Indonesia, the world’s largest coal exporter, is recalibrating, potentially becoming a larger customer for China’s clean energy technology.
In March of the current year, Indonesian President Prabowo Subianto announced a push into EVs, including plans to produce electric cars and expand charging infrastructure. Chinese firms play a major role in Indonesia’s clean energy supply chain, having signed over $54 billion worth of deals with the state utility in 2023 and pledging an additional $10 billion during Prabowo’s visit to Beijing in the second year prior. Reynolds confirmed that “There will be direct financial benefits to Chinese companies” from these developments.
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