Rising fuel prices driven by the Iran war are boosting demand for new and used EVs across Europe, industry data shared with Reuters shows, though some executives warn interest could fade if petrol costs fall.
Industry experts said improvements in charging infrastructure and a wave of more affordable models, including from Chinese carmakers, are helping make EVs more mainstream and supporting demand.
The US and Iran have agreed to an extended ceasefire, but shipping disruptions mean oil flows through the Strait of Hormuz may take weeks to normalise, with fuel prices likely to remain elevated for months.
Data provided to Reuters by research group New Automotive and industry group E-Mobility Europe show new EV registrations rose 34% year on year in May across 17 markets covering more than 90% of EU and European Free Trade Association car sales.
Fully electric models accounted for almost one in four new registrations in those markets.
Renault’s EV order book has risen by 50% in some countries since the Iran war began in late February, CEO Francois Provost told Reuters last week, though he predicted growth “will decrease” if fuel prices fall.
Ford’s European chief Jim Baumbick said the war has “increased customers’ interest” in EVs, but cautioned against seeing it as a lasting shift.
Market shifts for new and used EVs
The conflict has come as carmakers roll out cheaper EVs in Europe, addressing one of the main barriers to adoption — higher upfront costs compared with combustion engine cars.
Chinese carmakers are expanding beyond larger models into smaller hatchbacks for Europe, with BYD launching its Dolphin G in Berlin, Germany, last week.
“Consumer interest in EVs is clearly stimulated by low-cost, very good Chinese cars arriving on the market,” said Andy Palmer, a former Nissan executive who launched the mass market Leaf EV.
The supply of used EVs is also rising, with strong demand. Online marketplace OLX said sales leads for Chinese brands in France jumped more than fourfold year on year in May.
German new and used online marketplace Carwow said EV interest, measured by configurations and purchase inquiries, has stabilised at 70%-75%, up from about 40% earlier this year.
“This development has long since evolved from a short-term effect to a sustainable trend,” said Philipp Sayler von Amende, MD of Carwow Germany.
Used EVs are also relatively cheap. Price cuts led by Tesla in 2023 sharply reduced resale values, though prices are edging higher as demand strengthens.
Danish used-car platform Bilbasen expects used EV prices to rise 10% this year.
For now, used EVs are cheaper than comparable combustion engine models.
In Britain, two- to four-year-old EVs sell for about 33% of their original price versus 52% for fossil fuel cars, according to dealer services firm Cox Automotive.
Cox’s insight director Philip Nothard said a growing supply of affordable new and used EVs should sustain demand even if fuel prices ease.
“The market should stabilise,” he said. “I very much doubt we’ll see a downturn.”
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.