Europe’s Electric Vehicle Sales Surge on Iran War Fuel Spike—How Long Will It Last?
By Nick Carey, Gilles Guillaume and Marie Mannes
Fuel Prices and the Rise of Electric Vehicles in Europe
LONDON/PARIS/STOCKHOLM, June 18 (Reuters) - Rising fuel prices driven by the Iran war are boosting demand for new and used electric vehicles across Europe, industry data shared with Reuters shows, though some executives warn interest could fade if petrol costs fall.
Industry experts say improvements in charging infrastructure and a wave of more affordable models - including from Chinese automakers - are helping make EVs more mainstream, supporting demand.
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, with fuel prices likely to remain elevated for months.
Surge in EV Registrations
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 European Union and European Free Trade Association car sales.
Fully electric models accounted for almost one in four new registrations in those markets.
Automaker Perspectives
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 Europe 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
MARKET SHIFTS FOR NEW AND USED EVS
Cheaper Models and Chinese Automakers
The conflict has come as automakers roll out cheaper EVs in Europe, addressing one of the main barriers to adoption - higher upfront costs compared with combustion-engine cars.
Chinese automakers are expanding beyond larger models into smaller hatchbacks for Europe, with BYD launching its Dolphin G in Berlin 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.
Used EVs: Supply and Demand
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 enquiries - has stabilised at 70% to 75%, up from around 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.
Pricing Trends for Used EVs
Used EVs are also relatively cheap. Price cuts led by Tesla in 2023 sharply reduced resale values, though prices are now 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.
Comparing EV and Combustion-Engine Car Values
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 that we'll see a downturn."
(Reporting by Nick Carey. Editing by Mark Potter)
