Electric Vehicle Demand Surges as Oil Prices Rise [Weekend Money]

There are projections that rising oil prices could translate into benefits for the electric vehicle industry.

Jiwoong Yoo, a researcher at Daol Investment & Securities, stated in a recent report titled "Identifying Beneficiaries of Rising Oil Prices" that, as the era of high oil prices is likely to be prolonged over the mid- to long-term, electric vehicle consumption has surged.

Yoo explained that since oil prices began rising in February this year, demand for electric vehicles has increased, which in turn has raised the burden on finished vehicle supply chains, creating a cycle that further boosts electric vehicle demand. As of last month, electric vehicle demand in France and Germany increased by 69% and 66%, respectively, compared to the same period last year.

In the United States, a rebound trend was observed. Although electric vehicle demand in March dropped by 15% year-on-year, prices of imported internal combustion engine vehicles rose due to a 15% import tariff, leading the U.S. electric vehicle market share (M/S) to rebound from its low point in February and reach 5.9% in March.

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He emphasized that the rise in global electric vehicle demand is not simply a secondary effect of higher oil prices, but is primarily driven by the steep increase in prices of internal combustion engine vehicles. Yoo noted, "In fact, the price gap between Tucson Hybrid and Ioniq 5 within the United States has narrowed to less than 10%, and with the introduction of mid-nickel batteries or the launch of a new model year for the Tucson, this gap will shrink even further." He added, "This phenomenon is expected to begin emerging in the second half of this year, and in the case of Tesla, a rebound in sales may appear ahead of the trend."

He also commented that the rebound in U.S. electric vehicle demand is expected to benefit domestic auto parts makers. For HL Mando, revenue from non-affiliated electric vehicle OEMs is approaching 20%, and the company is expected to achieve its highest quarterly operating profit ever in the 11th quarter this year. L&F is also projected to reap the greatest benefits among domestic material companies from the rebound in European electric vehicle demand.

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