The Impact of the Crude Oil Price Volatility on the New Energy Vehicle and Transportation Industry

Global crude oil prices had risen sharply since February 2022, when news broke that Russian soldiers had invaded Ukraine. Many other industries have been affected, including green energy vehicles and transportation. This paper uses XPENG Automobile and the air transportation industry as examples, selecting stock data from June of last year and modeling and analyzing the data using the ARMA-GARCH method. Key findings from this research show that the rise in crude oil prices will inevitably increase the cost of using cars for consumers; hence, the rise in oil prices will indeed increase the sales of Xpeng Motors. Automobile manufacturing involves various sub-sectors of the manufacturing industry, and rising oil prices will increase production costs in these industries. When the price of oil rises, the cost of other items that are derived from oil, such as raw materials, plastics, and every kind of molded good, also increase. The rise in the cost of energy leads to an increase in the cost of manufacturing, and an increase in the cost of oil leads to a rise in the cost of transportation. Consumers will now have less money available for spending resulting in a decline in the economy of the sector. Putting more money into oil and gas companies would not be advisable due to the unstable supply.