Energy crisis drives a renewed acceleration in global auto electrification

Overview

This report updates the GS EV sentiment map around the recovery in global auto electrification. The core conclusion is that, against the backdrop of the energy crisis, rising fuel prices, and demand for energy security, BEV penetration momentum is recovering, HEVs are benefiting in some markets as well, and expanding energy storage system demand is also creating new growth scenarios for automotive battery applications. At the same time, rising raw material costs for aluminum, naphtha, memory, and others are expected to compress automaker margins in 2026, while price pass-through remains insufficient.

Core views

Goldman Sachs believes the global electrification trend is strengthening again: the share of countries with improving BEV sales mix has continued to rise, PHEV trends are milder but still point to electrification, and while overall auto demand is under pressure in some emerging markets, BEVs remain relatively resilient. In China, narrower NEV discounts and export expansion support a constructive view on BYD; growth in both BEV and HEV in Thailand shows high-efficiency vehicles are benefiting; in India, caution is needed on the impact of natural gas prices on automakers with high CNG exposure; Tesla mentioned rebounding sales in North America and EMEA, but as of March a clear recovery in BEV sales in the US and Canada had not yet been explicitly verified.

Analysis framework

The report combines monthly sales, year-over-year and month-over-month changes, powertrain mix, regional price checks, energy and raw material prices, automaker disclosures, and the energy storage demand outlook for its assessment. The GS EV sentiment map places sales performance, overall TIV year-over-year change, year-to-date pricing, and month-over-month changes in BEV penetration within the same framework to compare electrification momentum and pricing pressure across countries and regions.

Methodology notes

• Market sentiment mapGS EV Sentiment Map

  Assess regional electrification sentiment by combining sales, pricing, and BEV penetration

  This framework looks at sales performance, TIV year-over-year change, pricing changes, and month-over-month changes in BEV penetration across countries or regions to judge whether EV demand is improving and whether price competition is easing.

• Fundamental factorsGS Factor Profile

  Relative ranking of growth, financial returns, valuation multiples, and composite factors

  Goldman Sachs Factor Profile compares stocks against the covered market and industry peers using indicators such as forward sales, EBITDA, EPS, ROE, ROCE, CROCI, and valuation multiples.

• M&A probabilityM&A Rank

  A 1-to-3 score indicating acquisition probability

  M&A Rank 1 represents a relatively high 30%-50% probability of being acquired, 2 represents a medium 15%-30% probability, and 3 represents a lower 0%-15% probability; some ratings are incorporated into target prices.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• BYD

  China NEV leader and beneficiary of energy storage-related demand

  Strengths

  Narrower NEV discounts and export expansion in China; the report maintains a Buy view; expanding BESS demand increases battery application scenarios.

  Weaknesses

  China NEV sales were weak in the short term in the third week of April, and battery material lithium prices are rising.

  Comparison

  Compared with some global automakers, BYD benefits simultaneously from Chinese exports, NEV demand, and energy storage applications.

  Risks

  Renewed intensification of price competition, rising raw material costs, and short-term weakness in NEV demand.

• Tesla

  Beneficiary of BEV recovery and BESS demand

  Strengths

  The company stated on its Q1 earnings call that sales in North America and EMEA are rebounding, while demand in Asia-Pacific and South America continues to grow; expanding energy storage demand provides an additional growth scenario.

  Weaknesses

  As of March, a clear rebound in BEV sales in the US and Canada has not yet been confirmed.

  Comparison

  Compared with traditional automakers, Tesla is more sensitive to the twin themes of BEV and energy storage.

  Risks

  North American BEV demand recovery falls short of expectations, power supply concerns, and price competition.

• Toyota

  Beneficiary of rising HEV demand

  Strengths

  Thailand HEV sales rose 30% year over year, with stronger demand for high-efficiency products; Toyota is a global market share leader.

  Weaknesses

  BEV transition is relatively not the main positive driver in the report.

  Comparison

  When the energy crisis and power supply concerns coexist, HEVs have a transitional advantage over pure BEVs.

  Risks

  Accelerating BEV penetration may weaken HEV long-term runway, while raw material costs compress profits.

• Denso

  Beneficiary as an HEV inverter supplier

  Strengths

  Thailand HEV growth boosts demand for key components such as inverters.

  Weaknesses

  Affected by HEV vehicle sales and customer product cycles.

  Comparison

  Compared with automakers, Denso benefits from HEV penetration through the supply chain.

  Risks

  HEV demand pullback, insufficient cost pass-through, and customer concentration risk.

• GS Yuasa

  Beneficiary of automotive battery and energy storage applications

  Strengths

  Expanding ESS/BESS demand may provide new applications for automotive batteries and improve capacity utilization.

  Weaknesses

  The report does not provide clear quantified sales or earnings data.

  Comparison

  Similar to BYD and Tesla in benefiting from energy storage, but with different business scale and market positioning.

  Risks

  Energy storage installations fall short of expectations, battery price volatility, and intensifying competition.

• Maruti Suzuki

  Exposure to rising natural gas price risk in India

  Strengths

  India's March sales grew both year over year and month over month, while inventory declined.

  Weaknesses

  It has a high mix of CNG vehicle sales, and in some states natural gas prices have exceeded gasoline prices.

  Comparison

  Compared with automakers with lower CNG exposure, Maruti Suzuki is more sensitive to natural gas prices.

  Risks

  Sales momentum weakens after April and fuel prices continue rising.

Key data

• Share of countries with improving BEV sales mixJanuary 30%; February 60%; March 80%Among the top 30 countries, the share of countries with month-over-month improvement in BEV sales mix.
• Share of countries with improving PHEV sales mixJanuary 35%; February 48%; March 32%The trend is milder than for BEV, but still indicates an electrification direction.
• Q4 WTI forecast$83As of April 27, Goldman Sachs' commodities team raised the forecast from $75 to $83.
• 2026 margin impact3 percentage points deterioration year over yearMainly due to rising prices of raw materials such as aluminum, naphtha, and memory; price increases are still insufficient to fully offset costs.
• India March auto sales+11% year over year; +3% month over monthInventory declined and no clear demand slowdown was seen, but rising gasoline, diesel, and natural gas prices create follow-on risks.
• China NEV sales in the third week of April-10% versus two weeks earlier; -43% year over yearFewer new model launches ahead of the Beijing Auto Show; NEV discounts narrowed, while ICE discounts widened.
• Thailand March BEV sales+29% year over yearElectrification in Thailand is reflected not only in BEV, but also in HEV growth.
• Thailand March PHEV sales-42% year over yearDiverged from BEV and HEV performance.
• Thailand March HEV sales+30% year over yearDemand growth for high-efficiency vehicles benefits Toyota and Denso.
• Japan grid BESS capacity outlook2-4 GW in 2024; could rise to 10 GW by 2030Renewable energy grid integration and energy security are driving demand for energy storage systems.
• BYD disclosed ratings and pricesBYD Co. (A) Buy, Rmb99.98；BYD Co. (H) Buy, HK$103.50From the report disclosure page.

Impact & implications

If energy prices remain elevated, consumer acceptance of high-efficiency vehicles such as BEVs and HEVs may continue to improve, while energy storage demand will expand application scenarios for automotive batteries and improve capacity utilization for some battery producers. From an investment perspective, Chinese NEV exports and narrower discounts support BYD, strong HEV demand benefits Toyota and Denso, and expanding BESS demand benefits Tesla, BYD, and GS Yuasa. However, cost inflation, price competition, and regional demand divergence will limit margin improvement across the industry.

Risks

• Rising raw material prices such as aluminum, naphtha, and memory lead to an approximately 3 percentage point year-over-year deterioration in 2026 margins.
• At present, no region has fully offset rising raw material costs through price increases.
• Price cuts appeared in Indonesia and Brazil in March, indicating that price competition remains in some markets.
• Rising natural gas prices in India may hit demand for CNG vehicles, especially affecting Maruti Suzuki.
• China NEV sales are weak in the short term, with the third week of April down 10% from two weeks earlier and down 43% year over year.
• As of March, a clear rebound in BEV sales in the US and Canada has not yet been confirmed.
• If the energy crisis is accompanied by power supply concerns, relative demand for BEVs versus HEVs may change.

What to watch

• Whether the share of countries with improving BEV sales mix can remain high in subsequent months.
• Whether China NEV discounts continue to narrow, and whether wider ICE discounts trigger a new round of price competition.
• Whether the overseas export expansion of Chinese automakers continues after March.
• The price trends of WTI, gasoline, diesel, natural gas, lithium, and other key energy and raw materials.
• India's auto sales momentum after April and changes in CNG vehicle demand.
• Whether growth in BEV and HEV in Thailand continues, and whether the decline in PHEV improves.
• Whether Tesla's claimed sales rebound in North America and EMEA can be validated by monthly sales data.
• The pace of grid BESS capacity expansion in Japan and globally, especially investment related to the 10 GW target by 2030.