By Niu Yuhan

Exports of China’s “new three” products rose sharply in March: electric vehicles climbed by 53% compared to the same month last year, while lithium batteries were up 34% and solar cells jumped 80%, according to customs data reported on by Bloomberg. 

China in pole position

Analysts attribute this growth largely to the conflict in Iran, which has disrupted traditional energy supplies and boosted global demand for alternative energy sources. 

“This is just the beginning, the knock-on effects of high energy prices will be unfolding for months to come,” Euan Graham, a senior analyst at Ember, told Bloomberg. “Clean technologies are an escape from soaring fuel costs for consumers and a long-term route for countries to reduce fossil fuel reliance. China is well-positioned to meet this growing demand.” 

Surge in battery orders

At the company level, the shift is already visible. One battery exporter told Yicai that overseas clients now treat batteries as essential rather than optional.

Since early March, orders for lithium and semi-solid-state batteries have surged, causing manufacturers to ramp up production, she added.

However, as well as driving demand, the conflict is also disrupting supply chains. In March, one Chinese distributor reported that around 1,200 EVs, including models from Changan and BYD, were left stranded at sea, unable to reach port due to shipping disruptions.

Geopolitical risks

Beyond immediate logistics challenges, some see broader structural shifts emerging. A manager at an energy firm in Jiangsu said geopolitical instability could reshape global investment patterns for data centres, with more projects moving to relatively stable regions such as Southeast Asia and driving increased demand for energy storage in those markets.

Lizzi C. Lee, a fellow on the Chinese economy at the Asia Society Policy Institute, warned that high oil prices also inflate transport and production costs and might affect the demand.

According to Yicai, many Chinese exporters have been forced to use longer, rerouted shipping lanes to ensure delivery. One energy storage exporter said they raised prices by more than 10%. 

Cui Dongshu, secretary general of the China Passenger Car Association, told Jiemian News that some Chinese automakers are exploring alternative ports in Oman and Jordan, as well as increasing the frequency of land routes such as freight trains to Europe.

Although higher freight and insurance costs are likely to squeeze profit margins in the short term, Cui argued they are unlikely to undermine the core advantages of Chinese automakers, including the scale and efficiency of their supply chains and ability to control costs.

First published in Dialogue Earth.