The crisis in the Strait of Hormuz is directly impacting the Asian electric vehicle market. The near-halt of oil and LNG shipments has sharply increased fuel prices, accelerating the shift towards electric vehicles. Electric vehicle sales have reached record levels, particularly in China, Australia, and New Zealand. The Strait of Hormuz is a critical energy transit point carrying approximately 20% of global oil and LNG shipments. Up to 80% of crude oil shipments destined for Asia pass through this strait. The large-scale halt in shipments following the US-Israeli attacks on Iran has been described by the International Energy Agency as the largest supply disruption on record.
Fuel prices have risen sharply, driving both individual users and companies towards electric vehicles. Electric vehicle loans have doubled. A Chinese electric vehicle manufacturer's overseas market share has more than doubled, reaching 22.7% by 2026. The crisis is not just a temporary surge in demand; it is creating a structural transformation in transportation. Electric vehicles are now seen as an "economic shield" for consumers. It is predicted that this trend may be permanent even after the war. While critical minerals used in battery production (lithium, cobalt) are highlighted, the sudden surge in demand for electric vehicles makes infrastructure deficiencies (charging stations, energy grid) more visible. In short, the energy crisis in the Strait of Hormuz has become a catalyst accelerating the Asian electric vehicle market. The fragility of fossil fuel dependence highlights EVs as not only an environmental but also an economic necessity. Following the US-China rapprochement, the European automotive sector will face increased competitive pressure and a redefinition of strategic dependencies. As China's production and export power grows, closer cooperation with the US will force Europe to both diversify its supply chain and accelerate its own industrial policies.
While competitive pressure is increasing in the European automotive sector, Chinese-made vehicles reached 7% of EU sales in 2025, and this rate continues to rise. The US-China rapprochement could lead to a stronger positioning of Chinese brands in the European market, while European manufacturers are struggling with price competitiveness due to high energy and labor costs. While the EU is dependent on China for supply chains and raw materials, particularly critical minerals like lithium, nickel, and cobalt, 31 new strategic projects are being launched in 2025; the goal is to increase its own processing and recycling capacity by 2030. The EU's objective is for all new vehicles to be zero-emission from 2035 onwards; electric vehicle sales are projected to reach 25% in the first half of 2025, but charging infrastructure and high electricity prices remain obstacles.
The European automotive sector directly employs 1.4 million people and indirectly employs 13 million. The US-China rapprochement could accelerate the workforce transformation in Europe; SMEs, especially those dependent on the internal combustion engine supply chain, are considered at risk. The EU is trying to support this transformation through retraining and social funding. As Europe must accelerate industrial policies, reduce dependence on critical raw materials, and manage the EV transition while mitigating inequalities to maintain its competitiveness in the aftermath of the US-China rapprochement, for major producers like Germany, France, and Italy, this process means both closer cooperation with the US and a strategic balance against China.
