Endohedral fullerenes, which can switch between distinct states with different geometries when triggered by external electric fields (EFs), can be used as logical devices at the molecular scale. However, the movement of electrons around fullerenes exerts an electrostatic shielding effect which alleviates the Coulomb force experienced by endohedral dopants, and thus must be properly evaluated for better elucidating the switching mechanism. Here we introduced new components to the energy decomposition scheme based on the block‐localized wavefunction method (i. e., BLW‐ED), to incorporate the shielding effect explicitly. We analyzed the external EF‐driven rotation of enclosed dipolar molecules inside C70 and evaluated the magnitudes of shielding in terms of the gradients of electrostatic potential and energy. In the absence of external EF, intrinsic rotational barriers are dominated by the Pauli exchange repulsion between enclosed molecules and C70. When an external EF was applied, computations showed that only about 18% of external EFs can penetrate into the cage and interact with dipolar molecules. Thus, the shielding effect dramatically reduces the energy contribution originated from the interaction between endohedral dopants and external EFs. BLW‐ED analyses were further performed to inspect the effect of external EFs on the potential energy surfaces associated with the molecular rotation processes. Indeed, the interaction between penetrated EFs and enclosed molecules can still govern the orientational preferences of dipolar molecules and lower the rotational barrier for some dipolar molecules. But for other molecules, both the intrinsic electrostatic interaction and the Pauli repulsion respond to external EFs more sensitively and rule the changes of barrier heights and orientational preferences.