Gasoline topped $4.40 a gallon in the U.S. in September, and Brent has sat above $100 a barrel since early September, up from around $60 before the Iran war started. Drivers have responded about how you’d expect. New hybrid sales in the U.S. rose 24% through the third quarter, battery-electric registrations jumped 52% across Europe in August, and the International Energy Agency figures EVs will make up nearly 30% of global car sales this year.
That should have been a gift to the electrification trade, but a Bloomberg gauge of 104 EV-linked companies is down 1% for the year, dragged lower by Tesla and BYD, and Albemarle, the biggest U.S. lithium name, closed at $102.75 on Oct. 7, less than half its 52-week high. The money coming out of this oil shock has been picky about where it lands, and a fair amount of it has landed on companies most people wouldn’t file under “EV play” at all.
Honda’s Hybrid Payday
Earlier this year, Honda Motor Co. (NYSE: HMC) looked like one of the biggest casualties of the EV transition. The Japanese automaker booked more than $9 billion in costs to unwind its electric vehicle plans and posted its first annual loss in nearly 70 years, and CEO Toshihiro Mibe ended up apologizing to shareholders at the company’s annual meeting in June. Honda’s answer was to go all in on hybrids, with plans for 15 new hybrid models by 2030, mostly for North America, and the timing turned out to be close to perfect.
With gas north of $4, Honda sold more than 106,000 hybrids in the U.S. in the third quarter, a record, and hybrids now make up 53% of CR-V sales. CFO Masao Kawaguchi told reporters in August that rising fuel prices in North America were driving demand for its hybrids and fuel-efficient gas models, and the earnings back him up. Operating profit more than doubled to ¥530.8 billion in the April-to-June quarter, a record for any quarter in Honda’s history, and the company raised its full-year operating profit forecast by 30% to ¥650 billion.
Not all of that is about oil, since a weaker yen and smaller tariff bills helped too, and Honda still expects about ¥520 billion in restructuring costs this year. Investors have warmed up anyway, sending the ADRs up more than 7% in May when Honda’s guidance beat estimates. Honda didn’t see this oil shock coming any more than anyone else did, but after spending billions backing out of EVs, it happened to have exactly the cars people wanted when gas went over $4.
ChargePoint’s Wild September
ChargePoint Holdings Inc. (NYSE: CHPT) spent the last few years as a cautionary tale for EV charging investors, with a share price that kept sliding and a business that couldn’t seem to stop losing money. Then came its Sept. 2 earnings report. Revenue rose 18% to $116.1 million, well ahead of guidance, the adjusted EBITDA loss shrank to $4.8 million from $22.1 million a year earlier, and the company burned essentially no cash in the quarter. The stock jumped more than 70% the next day.
CEO Rick Wilmer was pretty direct about what’s behind it on the earnings call, pointing to U.S. gas at about $4.10 a gallon in late July, up roughly 31% from a year earlier, and saying the gap has “a direct impact on consumer purchasing decisions.” Much of the beat came from home chargers sold in North America, which is about as clean a sign as you’ll get that drivers are doing the math at the pump, even with the federal EV tax credit gone. Europe helped too, where Wilmer said EV sales rose 33% in July.
And then CFO Mansi Khetani poured a little cold water on it, calling those home charger sales lumpy and tied to events like Prime Day. ChargePoint guided third-quarter revenue to $105 million to $115 million, which works out to about 4% growth at the midpoint, it still loses money and it has roughly $96 million in cash. The shares also slid in early October as traders rotated into EVgo and Blink after an 82% monthly run. I’d want to see one more quarter like this before I believe the turnaround is real.
SolarEdge Is Not for the Faint of Heart
If you want a sense of how jumpy investors are about anything tied to the energy transition right now, look at SolarEdge Technologies Inc. (Nasdaq: SEDG). The inverter and home battery maker rallied almost 80% in May, then fell 24.6% in a single session after its second-quarter report in August, and it closed at $32.47 on Oct. 8, less than half where it traded in the spring.
The business underneath is in better shape than the chart, and Europe is the reason. SolarEdge’s European revenue more than doubled from a year earlier in the second quarter, which management tied to households buying solar ahead of expected electricity price increases and adding batteries as several big markets phase out net metering. Battery shipments climbed to 426 megawatt-hours from 331 in the first quarter, and total revenue rose 20% to $346.2 million as the company posted its first non-GAAP operating profit since 2023.
What sank the stock was everything else: third-quarter guidance of $310 million to $340 million came in well short of what Wall Street wanted, U.S. residential demand is still soft after the federal solar credit expired, and the company has picked up a string of shareholder class-action investigations since September. It’s a real European electrification story attached to a stock that trades like a coin flip.
The Company Behind the Plugs
Eaton Corp. (NYSE: ETN) is the least exciting name on this list and probably the safest. The power management giant makes the switchgear, panels and power electronics that sit between the grid and almost everything that gets electrified, and its second-quarter sales hit a record $8.5 billion, up 21%, with orders in its Electrical Americas business up 41% on a rolling 12-month basis. The stock set a new 52-week high after the report.
To be fair, most of that growth is coming from AI data centers, where Eaton’s electrical orders jumped about 85%, not from people trading in their gas cars. But Eaton also co-engineered ChargePoint’s new high-power charging platform, the two companies are building 130 fast-charging ports for Santa Monica’s Big Blue Bus fleet, and Eaton holds a stake in SPAN, the smart electrical panel maker. However the push away from oil plays out, Eaton gets paid on the wiring.
Vietnam’s Scooter Switch
What does an oil shock look like in a country where most people get around on motorbikes? In Vietnam, it looks like VinFast Auto Ltd. (Nasdaq: VFS) selling e-scooters about as fast as it can make them. Fuel shortages tied to the Middle East conflict pushed buyers across Southeast Asia toward electric two-wheelers earlier this year, and the Vingroup-backed automaker delivered 286,039 e-scooters and e-bikes in the second quarter, up 311% from a year earlier, along with 70,085 electric cars, up 96%. In March alone, it took more than 135,000 scooter orders and grabbed a record 17% of Vietnam’s entire two-wheeler market, gas bikes included.
The stock hasn’t followed the sales, closing at $3.07 on Oct. 8, well below the $4.88 it hit in April, and the market has its reasons for keeping its distance. The company still loses enormous amounts of money, it pushed back its second-quarter financial results because it needed more time to finalize them, and a meaningful share of its car deliveries go to related parties, including GSM, the Vingroup-linked ride-hailing company that agreed in May to take roughly one million EVs and four million e-scooters through 2030.
The demand is obviously real, but whether VinFast can turn it into a profit is a different question, and I’d want to see a lot more vehicles going to customers outside the Vingroup family before betting on it. Still, if you want to see where $100 oil is changing behavior fastest, I’d skip the Tesla showroom and go look at a scooter dealer in Hanoi.
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