The Strait of Hormuz Closure Sent Gas Prices Up. EV Stocks Quietly Benefited. Here's Why.
2026-07-16 10:30
•Leo Sun •The Motley Fool
•••••• •• Axe Capital view
Oil Spike from Strait Closure Benefits EV Sentiment
Rising oil prices due to Strait of Hormuz closure subtly lift EV stocks amid higher fuel cost concerns.
The recent closure of the Strait of Hormuz pushed crude oil prices higher, a shock that often spells bad news for many sectors on the JSE. Yet, it offers an unexpected tailwind for electric vehicle (EV) plays globally—a theme worth watching in South Africa. Higher oil pushes consumers to consider alternatives to gasoline cars, even locally where EV adoption is nascent. Rivian and Nio in the US have surged on this narrative, supported by fresh product launches and innovative tech like battery swapping. While South African EV presence is quiet, this oil-driven interest should be reflected in the rand (USD/ZAR), which tends to weaken with rising fuel import bills. Sasol, with its exposure to synthetic fuels and energy, might also feel the impact, though the link is indirect. The caution here: a sudden diplomatic resolution reopening Hormuz would quickly undo the oil rally, potentially reversing these trends. Given the evolving global energy environment, it's prudent to watch but tread carefully. this is just my opinion and not financial advice
I’d watch the USD/ZAR as a barometer for local oil import cost pressures and stay selective on energy counters like Sasol, avoiding direct EV equities for now until local adoption steps up.
- USD/ZAR
- Sasol
- Rapid resolution easing Strait closure tensions
- Slower-than-expected EV adoption in South Africa
6/10
The closure of the Strait of Hormuz since February 28 drove up crude oil prices, which paradoxically benefited EV stocks. Higher oil prices make electric vehicles more appealing to consumers seeking to escape oil price volatility. Rivian and Nio have emerged as top performers, with Rivian rising 16% since the closure due to its new R2 SUV launch, while Nio gained 4% and remains undervalued. Both companies are well-positioned for long-term growth in the expanding EV market.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Leo Sun
Categories: Equities, Earnings, Commodities, Consumer, Retail, Autos
Tickers: RIVN, NIO
Sentiment: Positive - Stock rose 16% since Feb 28 closure, driven by R2 SUV launch with lower manufacturing costs and improved gross margins. Analysts expect revenue to triple from 2025-2028 with narrowing losses. Trading at less than 4x sales makes it attractive for revaluation as a growth play. Stock rose 4% since closure and trades at less than 1x sales, appearing undervalued. Unique battery-swapping technology offers competitive advantage. Analysts expect revenue to double from 2025-2028 with profitability expected in 2027. Well-positioned with multiple sub-brands targeting different market segments.
Keywords: Strait of Hormuz closure, oil prices, electric vehicles, EV market growth, battery swapping, consumer preference shift
Insights:
- RIVN: Positive: Stock rose 16% since Feb 28 closure, driven by R2 SUV launch with lower manufacturing costs and improved gross margins. Analysts expect revenue to triple from 2025-2028 with narrowing losses. Trading at less than 4x sales makes it attractive for revaluation as a growth play.
- NIO: Positive: Stock rose 4% since closure and trades at less than 1x sales, appearing undervalued. Unique battery-swapping technology offers competitive advantage. Analysts expect revenue to double from 2025-2028 with profitability expected in 2027. Well-positioned with multiple sub-brands targeting different market segments.