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Since war broke out in Iran on 28 February, global oil prices have soared to unprecedented highs. The spike follows disruption in the Strait of Hormuz, the world’s busiest shipping channel for crude oil.
As the global conflict unravels and the oil crisis intensifies, analysts are recognising a renewed interest in electric vehicles (EVs) as consumers attempt to shield themselves from the impact of rising energy costs.
EV makers have reported a surge in enquiries and test drive requests for their electric models. Matt Galvin, UK head of EV maker Polestar, recognised this emerging trend, saying:
“The tide is turning on the volatile nature and over-reliance on fossil fuels and we are now starting to see ‘pump anxiety’ [over the cost of petrol] replacing ‘range anxiety’ [about whether batteries will run out of power mid-journey].”
Google Trends has demonstrated a similar pattern with searches for “EVs” and “used EVs” tracking renewed highs since the war began.
While EVs are not completely immune to an energy crisis and still place demand on the grid, they are considerably less reliant on fossil fuels than their ICE counterparts, making them cheaper to run when oil is scarce.
Some EV makers are in cashing in on this competitive advantage; in a recent advert on social media, BYD Europe deployed the catchphrase:
“Fuel prices change, your plans don’t. Save money with a BYD.”
According to a report by Transport & Environment (T&E), in the current climate of high oil prices, driving a petrol car in the US is expected to cost around $162 per month, compared to $76 for an EV.
Some analysts are framing the conflict as an opportunity to accelerate the global transition to renewables, as escalating geopolitical tensions expose the economic risks of over-reliance on fossil fuels.
Sam Reynolds, Research Lead at LNG Gas Asia, said on CNN that we are beginning to see “early signs” of this shift, especially across Asia. He added:
“The South Korean president said very early on that this Iran conflict is a great opportunity to rapidly and comprehensively transition to renewable energy. Across Asia, the picture is similar. I’ve heard reports that in countries like the Philippines and Vietnam, EV sales are booming in just the last month as buyers seek to insulate themselves from fuel price shocks.”
This renewed interest in EVs comes at a time when many automakers, including Porsche, Bentley, and Stellantis, have scaled back ambitious electrification targets following waning enthusiasm for EVs on the global stage.
It remains to be seen whether the current crisis represents an unlikely opportunity to steer the industry back on course, or whether current trends are merely temporary and reactive.
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