Shares in clean energy companies have outpaced oil majors since the outbreak of conflict involving Iran, as investors bet that higher fossil fuel prices will accelerate the shift towards renewables, the Financial Times reports.

China’s leading battery manufacturers — CATL, BYD and Sungrow — have added more than $70bn in combined market capitalisation since US and Israeli strikes on Iran at the end of February, according to Financial Times reporting on March 24. The gains reflect expectations that energy-importing economies will intensify investment in alternatives to oil and gas.

CATL’s domestically traded shares have risen 19%, while Sungrow is up 19.4% and BYD has gained 21.9% over the same period. The performance compares with increases of 15.2% for BP, 8% for Chevron, 8.3% for Shell and 4.7% for ExxonMobil, despite a 47% surge in oil prices.

The divergence highlights how equity markets are increasingly pricing in structural changes to energy demand, even as oil producers benefit from short-term price spikes linked to geopolitical disruption.

Investors are also responding to rapid technological advances in storage. The companies are benefiting from the “battery revolution” as prices fall, enabling broader adoption across electric vehicles and grid-scale storage. Industry expectations are rising around the development of longer-duration systems, including “the advent of the grid-level eight-hour battery” that will complete the green revolution and allow renewables to completely replace conventional source of power generation by solving the “baseload” problem.

China’s dominant position in battery manufacturing has placed its companies at the centre of this shift. The country already accounts for a large share of global battery production and continues to expand capacity, supported by policy incentives and strong domestic demand.

The scale of the opportunity is reflected in forecasts for storage deployment. The value of China’s domestic market for grid-scale battery storage is projected to increase to $199bn by 2032, up from $48bn last year, according to Mobility Foresights.

The rally in clean energy equities suggests investors expect the current geopolitical shock to reinforce longer-term trends, as countries seek to reduce exposure to volatile hydrocarbon supply and strengthen energy security through electrification and storage technologies.