According to a research report from UOB Kay Hian, escalating tensions between the US and Iran are pushing oil prices higher, which in turn is accelerating the adoption of electric vehicles. The short-term cost impact on the mainland automotive industry is expected to be limited. Overall, the impact on China's exports to Europe is minimal. If oil prices sustain an increase of $15 to $20 per barrel, the cost gap between fuel and electricity could widen by 20% to 30%, potentially boosting China's electric vehicle penetration rate by 2 to 3 percentage points in the short term.

Additionally, the report noted that most automakers experienced a month-on-month decline in February deliveries, as anticipated, due to the Lunar New Year holiday. Strong export growth helped offset weak domestic demand. Separately, BYD COMPANY (01211) launched its second-generation Blade Battery, megawatt-level charging technology, and several new models on March 5th.

Within the sector, the firm's top buy recommendations include Contemporary Amperex Technology Co.,Ltd. (300750.SZ), Ganfeng Lithium Group Co.,Ltd. (01772), MINTH GROUP (00425), and GEELY AUTO (00175). LI AUTO (02015) is identified as the top sell recommendation.