The oil shock of 1973 rewired the global automotive industry in ways that few anticipated. American consumers, accustomed to fuel-hungry domestic vehicles, found themselves at the pumps paying prices their cars were not designed to handle.
Japanese manufacturers, leaner, more fuel-efficient, and priced for markets where energy had always been expensive, moved into the gap. Within a decade, Toyota, Honda, and Nissan had established permanent footholds in the United States market that American manufacturers have never fully reclaimed.
The oil disruption now unfolding in the Middle East invites a direct parallel. Crude has reached over $110 a barrel amid conflict and the closure of the Strait of Hormuz. Import-dependent economies around the world are running the same economic calculation they ran half a century ago. Which manufacturers are positioned as Japanese automakers were then: lighter, cheaper to operate, and ready for a market suddenly preoccupied with energy cost?
“Every major market is running the same calculation,” said Al Christy Jr., founder and CEO of EquitiesFirst, a firm that provides equity-backed financing. “They are all looking for the financing and the technology to be in position as consumer behavior moves away from higher fuel costs.”
At the top of that list is China, which holds an advantage in both electric vehicles and battery manufacturing.
China’s Structural Head Start
China’s EV and battery manufacturers arrive at this moment with a base that Japanese automakers in the 1970s couldn’t have matched. China exported more than 2.6 million electric vehicles in 2025, with total export value rising 43% year-on-year.
Its battery production positions are even more commanding: China is expected to account for more than 70% of global battery manufacturing investment through 2026, and domestic energy storage capacity is projected to quadruple over the coming decade.
Meanwhile, Chinese investment is not staying inside China’s borders. Firms producing zero-emission vehicles invested more abroad than domestically in 2024, approximately $16 billion, primarily in battery production, with factories operating in Brazil and Thailand and additional ones planned for Turkey and Indonesia. The ambition has moved from strategy into concrete manufacturing infrastructure on multiple continents.
The Economics Are on Their Side
Underlying all of this is a change in energy economics that makes this decade different from earlier EV cycles. Solar-based electricity generation has become the world’s most cost-competitive source of new power: 91% of newly commissioned renewable energy projects globally now deliver electricity more cheaply than fossil fuel alternatives, according to IRENA. Countries seeking alternatives to oil dependence are no longer choosing between affordability and energy security. The economics have converged as the technology has improved. That convergence makes the current oil shock more consequential for EV adoption than any previous one.
For Chinese EV and battery companies, this creates a compounding advantage. Their products are competitive on price in markets where oil is expensive. Their battery technology underpins the storage infrastructure that makes distributed renewable generation reliable. And the macro environment, high oil, cheap solar, policy pressure toward electrification, is running in their favor across geographies.
The Headwinds Are Real
The 1973 analogy has limits worth considering. Japanese automakers entered the U.S. market as relatively unknown quantities, but they were not entering markets with explicit geopolitical reasons to resist them. Chinese EV manufacturers face a more complicated reception.
An EY survey of global buyers found that 50% expressed a preference for internal combustion vehicles over the next two years, with EV enthusiasm declining as policy uncertainty and automaker hedging on electrification timelines weighed on consumer confidence. In markets beyond Southeast Asia, where Chinese EV value and battery performance generate the strongest recognition, quality concerns and brand reputation issues were cited by more than half of skeptics. These are perceptual gaps that require years of sustained market presence and local investment to close.
At home, the competitive environment is equally demanding. AlixPartners estimated that only around 15 of the dozens of EV brands operating in China will remain viable by 2030. Rising input costs, with lithium and semiconductor prices moving higher alongside the oil disruption, are compressing margins for manufacturers already locked in aggressive price competition. Three of China’s leading EV makers raised prices in recent months, a move the South China Morning Post noted could reverse as domestic demand softens further. There is a sense in which the Chinese domestic market has stopped functioning as a reliable growth engine and has started exerting consolidation pressure.
“The companies that will matter in five years are managing capital across multiple time horizons at once,” Christy said. “You need liquidity for the near-term squeeze while committing to the international positioning that determines your long-term standing. Very few can do both without getting the financing structure right.”
Capital as the Long Game
Toyota and Honda’s rise in the 1970s showed that the right product at the right moment was only part of the equation. Organizational and financial discipline, the willingness to commit to a foreign market for years before it paid off at scale, mattered as much as the engineering. A similar quality could separate the Chinese EV manufacturers that achieve a durable global presence from those overtaken by the domestic shakeout.
For founders and major shareholders in China’s EV and battery sector, equity-backed financing has become one mechanism for addressing this challenge. Securing capital against existing equity holdings provides liquidity without ownership dilution.
Firms like EquitiesFirst, which provide securities-backed financing, are able to structure these arrangements for EV and battery sector participants looking to fund international expansion while maintaining their long-term equity positions. These firms tend to see increasing interest from sectors where founders hold significant equity alongside urgent capital deployment needs.
The energy economics of 2026 have created a moment that resembles 1973 more closely than any development in the intervening decades. China’s EV and battery manufacturers have the products, scale, and production infrastructure to occupy the space that Japanese automakers once claimed. Seizing that position requires capital structured for a long game as much as technology designed for one, and the manufacturers who get that right are the ones who will still be standing when the market structure settles.