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<Research>UBS: BYD/ CATL/ Li Auto Offer Good Risk-Reward as Oil Price Volatility Makes Total Cost of EV Ownership Attractive
Some Chinese automotive and new energy stocks staged a rally today. GEELY AUTO (00175.HK) soared by 8.5% to HKD17.44, while CATL (03750.HK) rose by 7.5% to HKD591.The current Iran ...
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<Research>UBS: BYD/ CATL/ Li Auto Offer Good Risk-Reward as Oil Price Volatility Makes Total Cost of EV Ownership Attractive
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Some Chinese automotive and new energy stocks staged a rally today. GEELY AUTO (00175.HK)  +1.320 (+8.214%)    Short selling $556.37M; Ratio 22.057%   soared by 8.5% to HKD17.44, while CATL (03750.HK)  +49.500 (+9.000%)    Short selling $1.04B; Ratio 33.586%   rose by 7.5% to HKD591.

The current Iran war is highly similar to the situation in 2022 when the Russian invasion of Ukraine led to spiking oil and lithium prices, UBS commented in its research report. The international oil price and commodities simultaneously pushed up the usage cost of fuel vehicles and the manufacturing cost of electric vehicles (EVs).

Related NewsM Stanley Ratings, TPs on CN Automakers (Table)
According to the latest spot price estimates by UBS, the cost of producing a battery EV/ extended range EV/ plug-in hybrid EV/ internal combustion EV will rise by around RMB7,000/ RMB6,000/ RMB5,000/ RMB3,000 compared to autumn 2025.

If oil prices remain at current levels, the annual usage cost of fuel vehicles may swell by about RMB2,000. This slightly improves the economic viability of EVs relative to fuel vehicles, partially offsetting the pressure from the withdrawal of stimulus policies and the introduction of new purchase taxes starting in 2026.

The current oil price volatility makes EVs more attractive from a total cost of ownership perspective, UBS stressed. Investors should pay renewed attention, as demand may recover faster than their expectations if the market forms inflation expectations regarding the transmission of commodity costs to vehicle prices.

Related NewsNomura: Launch of 2nd-Gen Blade Battery May Help BYD Secure More Orders but May Not Fully Reverse Overall Biz Situation
UBS believes that BYD COMPANY (01211.HK)  +1.200 (+1.238%)    Short selling $530.95M; Ratio 25.802%   , CATL (03750.HK)  +49.500 (+9.000%)    Short selling $1.04B; Ratio 33.586%   , and LI AUTO-W (02015.HK)  +0.800 (+1.159%)    Short selling $212.02M; Ratio 42.267%   (all rated Buy) offer good risk-reward characteristics.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-03-11 16:25.)

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