EV demand soars in Europe over petrol prices and Iran tensions

Demand in the U.S. and China has been waning in comparison

Rowan Dunne

Published

3 hours ago

Drivers across Europe have started to embrace electric vehicles as petrol prices continue to spike following the outbreak of war in Iran.

The conflict erupted on Feb. 28 when strikes disrupted the Strait of Hormuz and reduced global oil supplies by about 20 per cent. As a result, petrol prices soared to multi-year highs across the continent, prompting consumers to switch quickly.

In the first quarter of 2026, battery-electric vehicle (BEV) registrations in 15 major European markets jumped 29.4 per cent year-over-year, reaching nearly 560,000 units.

March alone saw a record surge of 51.3 per cent with more than 240,000 BEVs registered. This pushed the BEV share of new car sales to 21.2 per cent in the EU and European Free Trade Association countries. Overall European EV registrations climbed to almost 540,000 units that month, marking a 37 per cent increase.

Online marketplaces also reported sharp rises in inquiries, exceeding 50 per cent in Germany; 20 to 30 per cent in the UK and Spain; and a whopping 160 per cent in France between early March and early April.

These shifts already promise to cut projected oil consumption by two million barrels per year from first-quarter registrations alone.

Trend is not pervasive globally

Europe’s strong momentum contrasts sharply with slowing demand in the United States and China.

In North America, EV sales fell 27 per cent in the first quarter of 2026 to 320,000 units after federal incentives ended. Ford Motor Co (NYSE: F) (FRA: FMC1) even saw its battery-electric sales drop by 70 per cent.

In China, domestic registrations declined 21 per cent to 1.9 million vehicles during the same period, with March falling 14 per cent. The government introduced a new purchase tax on EVs for the first time since 2014, which led many consumers to delay big purchases and shift toward larger internal-combustion models.

Other economies, however, have responded similarly to Europe amid the geopolitical shock. Markets in Australia, New Zealand, Vietnam and Thailand recorded a combined 79 per cent increase in EV sales. The same petrol price hikes of more than 20 per cent drove this growth.

Companies poised to gain from rising demand in Europe

Tesla Inc (NASDAQ: TSLA) (ETR: Tl0) stands to capture the largest share of the benefits from Europe’s surge. The company recorded triple-digit registration growth in March. This included a 203 per cent jump in France to 9,569 units, a 178 per cent increase in Norway to 6,148 units and a 144 per cent rise in Sweden.

Volkswagen AG (FRA: VOW) also stands to gain significantly. Its ID.3 model topped online EV searches in Germany during March on major car marketplaces such as Mobile.de. Price-conscious buyers are flocking to the familiar German brand amid soaring petrol costs. The compact hatchback appeals strongly because it offers competitive pricing, access to generous local subsidies and the reassurance of a well-known European manufacturer with established service networks.

SAIC Motor Corp Ltd‘s (SHA: 600104) MG brand is also attracting cost-conscious European drivers with its affordable Chinese-built models.

These public companies position themselves to profit the most. They maintain strong European distribution networks, continue to benefit from existing subsidies and deliver vehicles that align what price-focused buyers are seeking.

🚨Tesla car registrations more than tripled in France in March and doubled across the Nordic countries.

The sharp jump shows the EV giant’s sales recovering strongly in Europe. pic.twitter.com/DA7khGvUIV https://t.co/RP9uzdrMeU

— Mario Nawfal (@MarioNawfal) April 1, 2026