Rising pump prices linked to the Iran conflict have coincided with a pronounced uptick in electric vehicle demand across Europe, industry data and market participants told Reuters. While the surge in interest has been supported by a stronger charging network and a wave of lower-cost models, some executives say the boost could prove transitory if fuel prices retreat.
Data shared by research group New Automotive and industry body E-Mobility Europe show that new EV registrations climbed 34% year-on-year in May across 17 markets that together represent more than 90% of car sales in the European Union and the European Free Trade Association. In those markets, fully electric models made up almost one in four new registrations.
The geopolitical backdrop remains fluid. The U.S. and Iran have agreed to an extended ceasefire, but shipping disruptions mean oil flows through the Strait of Hormuz may take weeks to normalise, and fuel prices are likely to stay elevated for months.
Automaker and executive responses
Renault has seen a marked increase in customer interest: Chief Executive Francois Provost told Reuters that the company's EV order book has risen by 50% in some countries since the Iran war began in late February, while cautioning that growth "will decrease" if fuel prices fall. Ford's Europe chief Jim Baumbick said the conflict has "increased customers interest" in EVs, but warned that the change in buying behaviour should not automatically be read as permanent.
Market dynamics for new and used EVs
One of the principal barriers to EV adoption has been higher upfront cost compared with internal combustion-engine cars. That obstacle is being attacked in part by manufacturers introducing cheaper electric models in Europe. Chinese automakers are broadening their European line-ups beyond larger vehicles into smaller hatchbacks; BYD, for example, launched its Dolphin G in Berlin last week.
Market participants see the arrival of competitively priced Chinese models as a clear catalyst. Andy Palmer, a former Nissan executive who launched the mass-market Leaf EV, said: "Consumer interest in EVs is clearly stimulated by low-cost, very good Chinese cars arriving on the market."
Supply of used EVs is also increasing, and demand for those vehicles is strong. Online marketplace OLX reported that sales leads for Chinese brands in France jumped more than fourfold year-on-year in May. German online marketplace Carwow said EV interest - measured by vehicle configurations and purchase enquiries - has stabilised at 70% to 75%, up from roughly 40% earlier this year. "This development has long since evolved from a short-term effect to a sustainable trend," said Philipp Sayler von Amende, managing director of Carwow Germany.
Used EVs remain relatively inexpensive in many markets. Price reductions led by Tesla in 2023 pushed down resale values, though secondhand EV prices are now starting to firm as demand strengthens. Danish used-car platform Bilbasen expects used EV prices to rise 10% this year. In Britain, two- to four-year-old EVs typically trade for about 33% of their original price, compared with about 52% for petrol and diesel cars, according to dealer services firm Cox Automotive.
Philip Nothard, insight director at Cox Automotive, said that a growing supply of affordable new and used EVs should help sustain demand even if fuel prices moderate: "The market should stabilise," he said. "I very much doubt that we'll see a downturn."
Implications for markets and sectors
The interplay between elevated fuel costs, more affordable EV options and expanding charging infrastructure appears to be reshaping consumer interest across new-car and used-car markets in Europe. Automakers, used-car platforms and energy markets are the most directly affected sectors as buying patterns shift in response to both short-term price signals and structural changes in vehicle availability and affordability.