The invention discloses a thermoplastic polyester elastomer heat-shrinkable casing tube for an automobile wire harness as well as a preparation method and an application of the heat-shrinkable casing tube. The heat-shrinkable casing tube comprises the following components in parts by weight: 50-80 parts of a thermoplastic polyester elastomer, 30-60 parts of halogen-containing resin, 5-15 parts of black masterbatch, 5-30 parts of diantimony trioxide, 0-100 parts of a flame retardant, 3-15 parts of a flame retardant synergist, 1-4 parts of a thermal stabilizer, 0.5-4 parts of an antioxidant, 0.5-2 parts of a silicone aid and 1-2.5 parts of a sensitizer. The preparation method comprises the following steps: mixing the thermoplastic polyester elastomer, the halogen-containing resin, the black masterbatch, diantimony trioxide, the flame retardant, the flame retardant synergist, the thermal stabilizer, the antioxidant and the silicone aid, adding the sensitizer, mixing, granulating, extruding to form a tube, performing irradiation crosslinking, stretching by expanding, shaping by cooling, flattening, and marking. The heat-shrinkable casing tube has the advantages of relatively low price, high-efficiency flame retardance, excellent mechanical property, low pollution, high-temperature oil resistance, acid-base corrosion resistance and capability of being applied in a severe working environment.