Introduction: The escalation of the Conflict between Russia and Ukraine has made international oil prices soar all the way, and domestic oil prices will enter the "8 yuan" era, and new energy vehicle stocks will indirectly profit from it, but how long can it last?
Luck has two ways of pampering others: one is to make his career smooth; the other is to make his opponent unlucky. In this way, new energy vehicle stocks have recently paid a "second kind of good luck".
1) Oil prices soared, stirring up the cold weather
Although Western countries have not yet chosen to sanction Russia on crude oil exports, investor uneasiness seems to have spread in the capital markets.
On March 1, WTI New York crude oil has exceeded $100 / barrel, an increase of 10.90%. On March 3, it even reached $116.57 at one point. And it may continue to rise, with great momentum to hold the $100/barrel mark. Some analysts even believe that international oil prices will rise to $145 / barrel. On March 3, WTI's April crude futures continued to close up 6.95% at $110.6, while Brent crude oil closed up 6.35% at $114 a barrel. The price of domestic No. 92 gasoline has exceeded 8 yuan / liter.
Because the price of oil has been rising all the way and there is no warning of stopping, this has put more pressure on the listed companies of traditional fuel vehicles and is not welcome. It is worth noting that the stock prices of traditional car giants such as Mercedes-Benz, Volkswagen, BMW, and Toyota fell in response.
Daimler Automobile's U.S. stock price plummeted 4.33% on the day of the outbreak of the Russian-Ukrainian armed conflict, and plunged 6.50% on March 3 to 66.19 US dollars per share; Volkswagen ushered in the lowest point of the stock price in nearly a year on March 3 - 23.25 US dollars / share; BMW Motor also suffered the same misfortune, only on February 24, the stock price fell by 4.99%, and on March 3, it fell to the lowest point in nearly a year - 28.25 US dollars / share.
In contrast, new energy vehicles driven by electricity are immediately sought after by capital because of "oil immunity". The global new energy vehicle sector stock prices generally rose. On February 28, the U.S. new energy vehicle sector continued to rise, with Ideal Auto up more than 10%, Weilai Auto up more than 7%, Tesla up 7.48%, and Xiaopeng Auto up more than 3%.
As the world's largest electric vehicle manufacturer, Tesla's stock price has closed at $879.89 per share from its low of $700 per share on February 24 to March 2, a staggering increase of 25.7% in just a few days, and its market value has increased by 100 billion yuan and recovered the $900 billion mark.
Much of this is due to higher oil prices. In China, the stock prices of enterprises related to new energy vehicles such as "lithium industry double males" and BYD have remained firm in the context of the situation in Russia and Ukraine, and have not declined as a whole like vehicle manufacturers.
2) How long can high oil prices last?
Although oil prices are rising fiercely now, the author believes that there are many factors that will hinder the high operation of oil prices in the future.
Russia is the world's third largest oil producer, with oil production in 2021 being about 517 million tons, accounting for 11.69% of the world's total. But the international community is not short of the means to respond to the oil crisis.
First, the easiest thing to do is to release the strategic reserves of oil resources. This is the most effective way to deal with tight oil supply in the short term. If Russia's oil supply is really interrupted for various reasons, the United States and other major oil consumers can release their oil reserves at high prices to curb the excessive rise in oil prices.
On March 1, the 31 members of the IEA Governing Council agreed to release 60 million barrels of oil reserves as a positive signal to the global oil market. The 60 million barrels of oil also account for only 4% of the total inventories of these 31 member countries.
Second, if the oil crisis persists for a long time, exporters are likely to choose to increase production under the temptation of high oil prices.
Saudi Arabia has the second largest oil reserves in the world. During the Gulf War, Saudi Arabia increased oil production to ensure oil supply in the global market. In addition to Saudi Arabia, European and American countries may also achieve the purpose of increasing oil production by lifting oil sanctions on Iran. Of course, the premise of this is that substantive progress will be made in the negotiations on the Iranian nuclear issue.
Finally, the most time-consuming, but at the same time the most "root cause" method is to develop new energy sources. The share of non-fossil energy in primary energy consumption in the world has increased from 14.7% in 1990 to 17% in 2020. Under the influence of many potential oil crises, new energy technologies will be further developed. According to professionals, by 2060, the proportion of non-fossil energy in the world will reach 42.3%.
In addition to human factors, crude oil prices would have had a lot of downward pressure. Under the impact of the new crown epidemic, production has been blocked, and the demand for transportation oil is not high. And as the weather warms up, the demand for heating oil in Europe is also declining. All of these factors are good for calming the panic that is currently pervasive in the oil market.
3) New energy vehicle companies still have a hard battle to fight
Although people's anxiety about the oil crisis is good for the new energy sector, the author believes that China's pure electric vehicle (EV) penetration rate still faces many difficulties if it wants to exceed expectations.
First of all, the Conflict between Russia and Ukraine is likely to hit the supply chain of the entire automotive industry. As the saying goes, "Under the nest, there will be a complete egg." Considering the important position of Russia and Ukraine in global metal production, new energy vehicles also face the risk of continued rapid and sharp price increases in upstream raw materials.
For example, the power battery of new energy vehicles uses metal nickel, while the chip on smart cars uses metal palladium.
According to JPMorgan Chase, Russia's MMCNorilsk Nickel PJSC mines 11 percent of the world's nickel and 40 percent of the world's palladium.
Once the armed conflict between Russia and Ukraine is not properly resolved, the production cost of new energy vehicles is likely to rise rapidly.
In fact, due to the deteriorating relations between Russia and Ukraine, the prices of these two metals have begun to soar as early as December 2021.
Secondly, the price of lithium ore is far from falling. Since lithium ore has a long production cycle from exploration to mining, it is still difficult for lithium ore prices to fall back in 2022.
In the case of rising costs and declining subsidies, how many new energy vehicle companies can withstand the pressure of rising prices?
From the end of 2021 to February 15, 2022, 16 domestic car companies announced price increases for their new energy models. Among them are Tesla and BYD, which rank in the top two in terms of global new energy vehicle sales.
Although China's electric vehicle penetration rate has increased explosively from 5.8% to 14.8% in 2021. Electric vehicles are gradually gaining recognition from automotive consumers. However, if domestic electric vehicle companies want to maintain sales in the case of a sharp increase in the cost and price of electric vehicles, they must be prepared to fight a hard battle in the two aspects of automobile production and product marketing.