The war in the Middle East, now entering its second month, is expected to push drivers toward electric vehicles (EVs) and push them away from their traditional internal combustion engine (ICE) vehicles, CNBC reported.
Citing analysts, the report said the shift would not happen overnight but would unfold gradually. This comes after Iran’s Islamic Revolutionary Guard Corps (IRGC) announced the closure of the Strait of Hormuz – a key waterway through which almost a fifth of the world’s oil and liquefied natural gas (LNG) supplies pass.
The move followed days of conflict in which the US and Israel targeted Iranian military and naval assets and reportedly killed several senior leaders, including former Supreme Leader Ayatollah Ali Khamenei.
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Since the Strait of Hormuz was closed, countries are now at loggerheads and at the mercy of Tehran, with some even being forced to declare a national state of emergency. It severely disrupted oil exports and drove prices to record highs. In addition, she highlighted the extent to which the world is dependent on fossil fuel trade routes.
The US and Europe are seeing increased interest in EVs
According to the report, since the start of the war in late February, several car sales platforms in the US and Europe have seen an increase in consumer interest in electric vehicles. This comes at a time when much of the mainstream auto industry is shifting back to ICE vehicles.
According to Autotrader, an online vehicle marketplace, on March 26, it reported a 28% increase in new EV inquiries and a 15% increase in used inquiries. Electric vehicle specialist Octopus Electric Vehicles said on March 25 that demand for electric vehicle leasing has increased by 36% since the start of the conflict.
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Despite increased interest in inquiries from major US automakers, including Ford, General Motors and Stellantis (Jeep’s parent company), they have all backed away from their earlier plans for electric cars. Slower-than-expected consumer demand and changing political conditions forced them to revise their strategies, leading to tens of billions of dollars in losses and restructuring costs.
Fallout from Iran war could affect demand for EVs: Experts
The expert noted that while the situation is currently still evolving, it is already clear that fallout from the US-Iran war could affect demand for EVs. He said owning a battery electric vehicle (BEV) is now more compelling for high-mileage drivers as conventional petrol cars have become more expensive due to the surge in oil prices.
In addition, owning an EV could provide households with an additional layer of energy independence.
Higher gas prices drive consumers to electric cars
According to Erin Keating, Cox Automotive’s senior director of economic and industry insights, consumers are likely to consider pure electric vehicles if gas prices continue to rise; however, the change in purchasing behavior from traditional vehicles to EVs can be slow. To see any significant increase, the company expects gas prices to remain elevated for the next 6 months or more, which could then drive consumers to purchase EVs.
Read also | Oil crisis caused by US-Iran war may boost Chinese electric car makers: Report
Beijing Electric Car Makers To Benefit From War: Report
According to a CNN report in March, electric car makers in Beijing are likely to benefit from the ongoing war as gasoline prices rise and electric car prices fall. The move could boost the global expansion of China’s electric car industry, especially in Asian countries most affected by fuel shortages. Citing analysts, the report also suggested that the oil crisis could act as a turning point for the clean energy industry in Asian countries, similar to Russia’s 2022 invasion of Ukraine, which ultimately boosted renewable energy investment in Europe.
