Pain at the pump fuels EV rush in China, driving a timely boost for carmakers

he oil price surge could offer timely relief for EV makers, which have been grappling with softer demand following the rollback of subsidies.

Photo: Xinhua Rising fuel costs triggered by the Middle East crisis are emerging as an unexpected tailwind for China’s electric vehicle (EV) makers, as consumers increasingly pivot towards battery-powered cars to avoid surging petrol bills.

With Brent crude climbing past the psychologically significant US$100-a-barrel mark – and now trading above US$110 – mainland buyers are turning away from petrol vehicles, according to dealers and analysts. “It’s a no-brainer for me now,” said Wang Wenbo, a 25-year-old first-time car buyer. “I was weighing the pros and cons last month and initially preferred petrol cars because I thought they were more reliable, but now I’d choose an electric vehicle to save money.

Fuel costs would simply be too high at these oil prices.” Earlier this week, China’s top economic planner raised retail petrol and diesel prices, although the increases were capped at about half the level dictated by the official pricing mechanism.

Even so, Wang estimated the adjustment would add about 200 yuan (US$29) to his monthly fuel bill.

With no clear end to the US-Israel conflict involving Iran – and the Strait of Hormuz still closed – he said the case for EVs had strengthened further. “Chinese electric cars are already high quality and high performance; it just makes more sense now,” he added.

UBS estimated in early March that if oil prices held at around US$90 a barrel, annual fuel costs for petrol car owners would rise by roughly 2,000 yuan.

With prices now well above that level, the pressure on drivers is intensifying. “The psychological impact matters as well,” said Ivy Yu, a 22-year-old university student planning to buy a car with support from her parents. “Since it’s unclear how high oil prices could go, choosing an electric car feels like the safer option.” The shift in consumer sentiment comes despite a policy headwind.

Since the start of 2026, buyers have been required to pay a 5 per cent purchase tax on EVs, after a full exemption last year.

The incentive is set to be phased out entirely by 2028.

Even so, early data suggests demand is rebounding.

From March 1 to 22, EV makers delivered a total of 495,000 vehicles in mainland China, up 66 per cent from the same period a month earlier, according to the China Passenger Car Association (CPCA).

EV makers delivered a total of 495,000 vehicles i

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