EVs Are Big Winners of the Iran War—Just Not American Ones

Key Points

• The Iran war triggered a global oil supply shock, but record U.S. energy production in 2025 helped insulate the country from the worst effects.
• Global EV adoption accelerated sharply outside North America, with China selling 12.9 million units and Europe growing 33% year over year in 2025.
• BYD surpassed Tesla in global EV sales in 2025, yet BYDDF shares have fallen roughly 40% over the past year, trading at a trailing P/E of about 17.

The first round of peace talks aimed at ending the Iran war are in the books, but the damages stemming from the global oil supply shock will linger for years to come.

Prices for Brent crude, the benchmark for two-thirds of the world’s oil, have moderated from their one-year high of around $114 per barrel in early May to the high-$70s today. But that remains well above the one-year low of around $58 in December 2025, months before the conflict began.

For investors, the lesson is not simply that oil prices can spike during conflict. It is that energy security and vehicle electrification are becoming increasingly connected investment themes.

Two big winners have emerged: American oil and electric vehicles (EVs). However, those two results are incongruous, and knowing how they will affect the global economy could indicate future winners of their respective industries.

U.S. Record Oil Production Helped Absorb the Global Supply Shocks

According to the U.S. Energy Information Administration (EIA), the United States once again set records for natural gas and crude oil production in 2025.

EIA data found that “total energy production in the United States increased to a new record of 107 quadrillion British thermal units (quads) in 2025, a 3.4% increase from the previous record set in 2024.”

That gave the country a clear advantage over others as the Iran war rattled global markets. Throughout the war, the United States was able to tap into the Strategic Petroleum Reserve (SPR) to help offset price shocks. As the world’s largest producer of natural gas and oil, the country was able to withstand a degree of the fallout, leaning on domestic production and passing through costs where it could.

Today, SPR stocks are at their lowest level since 1983, underscoring how limited that emergency cushion has become. Nonetheless, the SPR can be replenished at an estimated rate of 680,000 to 1 million barrels per week, which could take anywhere from several months to a few years, according to the U.S. Department of Energy.

Meanwhile, countries without access to domestic crude supplies had to adapt, as they have been doing for years. That has largely centered on increasing renewable energy and broader sustainability efforts—two things the current administration is resistant to. President Trump has, for example, continuously vocalized his support of coal while issuing executive orders freezing wind energy leasing and letting EV tax credits expire.

However, while fossil fuels remain a critical part of the global energy landscape, outside of the United States, their role in transportation is under increasing pressure.

Global EV Adoption Is Accelerating Despite North America's Slowdown

For the global EV market, conditions are radically different.

North America is a laggard in adoption, with 91% of EV sales occurring outside the region last year. Sales in Europe and Asia, however, are illustrating how quickly the market is growing.

In 2025, the European EV market grew by 33% year over year (YOY), with sales in Germany—Europe’s largest economy—growing by 48% YOY. Meanwhile, Asia remains the world’s EV leader.

China saw 12.9 million units sold, compared to 4.3 million in Europe and just 1.8 million in North America, where sales contracted 4% last year. EV sales in China grew by 17% YOY, driven by increased domestic competition, aggressive pricing, and expanded model availability in the world’s second-most populous country, which is home to 1.4 billion people.

Underscoring that trend, industry consultancy firm Grand View Research forecasts the global EV market to reach more than $12.6 trillion by 2030, good for a compound annual growth rate (CAGR) of 26.7% per year, while the global EV battery market is forecast to undergo a CAGR of 22.2% through 2030.

BYD: Looks Discounted After Becoming the Global EV Sales Leader

In 2025, BYD OTCMKTS: BYDDF—a leading maker of EVs, rechargeable batteries, and renewable energy solutions—surpassed Magnificent Seven member Tesla NASDAQ: TSLA in global EV sales.

In its automotive segment, BYD designs and produces a broad range of passenger cars, buses, trucks, and commercial vehicles, with a particular emphasis on battery-electric and plug-in hybrid models.

BYD had surpassed Tesla in sheer production in 2024, but last year, sales eclipsed the Elon Musk-led firm’s, as Tesla’s sales declined around 10% over the past year.

But while shares of TSLA have gained more than 16% over the past year, shares of BYDDF have lost around 40%, including more than 30% since hitting their year-to-date (YTD) high on April 16.

But fundamentally, the company is sound, making the stock appear to be trading at a deep discount. In Q1, BYD missed earnings by one cent, but quarterly revenue of $21.77 billion beat analyst expectations of $21.05 billion.

The stock sports a trailing price-to-earnings (P/E) multiple of about 17, furthering the discount argument, and its 0.14 beta suggests that the stock is dramatically less volatile than the broad market. Short interest also hints that a share price floor could be in, with just 0.14% of the float currently being sold short.

NIO: Moving From Recovery Story to Execution Test

Established in 2014, NIO NYSE: NIO is a pioneer in the premium EV space, dedicated to the design, development, and manufacture of smart, high-performance EVs.

While the company’s approximately $12.5 billion market cap pales in comparison to BYD's $87.25 billion and Tesla's $1.52 trillion, its shares have seen a resurgence over the past year, gaining more than 47%.

But like BYD, NIO has corrected since its YTD high on April 16, falling by more than 26%.

Still, the stock is trading at a perceived discount. Despite a consensus Hold rating, analysts’ average 12-month price target for NIO implies more than 30% potential upside from current prices.

In its Q1 2026 earnings report, Shanghai-based NIO showed strong deliveries of 83,465 vehicles, up 98.3% YOY but down about 33.1% sequentially. Revenue rose 112.2% YOY to about $3.7 billion, while gross margin improved to 19%.

However, institutional ownership remains low at just under 49%, and current short interest of 5.88% of the float is worth monitoring. But the company has averaged nearly 22% revenue growth over the past three years, punctuated by nearly 39% growth in 2025, alongside earnings per share growth of more than 35%.