News
30/07/26
Energy crisis drives demand for EVs in 2Q: IEA
Energy crisis drives demand for EVs in 2Q: IEA
Edinburgh, 30 July (Argus) — Fuel price volatility caused by supply disruptions
linked to the war in the Middle East supported electric car demand in the second
quarter, according to the IEA. Electric car sales rose by 4pc on the year in
April-June and by 35pc from the first quarter. But sales fell by 1pc on the year
in January-June because of weaker demand in China. More than 90 countries posted
higher electric car sales on the year in the first half of 2026, according to
the IEA. But this did not fully offset an almost 20pc drop in China, the largest
market for electric vehicles (EVs), which weighed heavily on global sales
volumes. EVs are the largest driver of global battery material demand. Outside
China, growth was particularly strong in several markets. Electric car sales in
Australia, Brazil, India, South Korea and Vietnam roughly doubled between March
and June compared with the same period last year, according to the IEA. Global
car sales, including internal combustion engine vehicles, fell by 5pc on the
year because of weaker sales in China and the US. "Road vehicles account for
nearly half of global oil use, leaving the sector particularly exposed to fuel
price volatility and supply disruptions," the IEA said. Europe recorded the
strongest growth among the major EV markets in January-June, according to the
IEA. Sales rose by 30pc on the year in the first half. Germany sold 140,000 more
electric cars than in the same period last year, while the UK and France sold
around 100,000 and 95,000 more, respectively. "Across the European Union,
electric car sales have grown to represent more than 30pc of total car sales
during the first half of 2026, compared to 27pc in 2025," the IEA said. The
share in the UK rose to 38pc. Globally, electric cars accounted for 24pc of all
cars sold in the first half of this year, 1 percentage point higher than in the
same period last year, the IEA said. It expects electric cars to account for
29pc of total car sales globally in 2026. The IEA said EVs are part of policy
responses to higher oil prices because they can bolster energy security in
oil-importing countries and help "shield consumers and businesses from price
fluctuations". Hostilities between the US and Iran, which started at the end of
February, and the closure of the strait of Hormuz have pushed global crude and
oil product prices higher. The IEA pointed to "particularly hard-hit" regions
such as southeast Asia, where governments have introduced temporary tax breaks
for EVs, scrappage schemes and fleet electrification programmes to cut oil
demand and buffer future price shocks. "Elsewhere, there are signs of a reaction
among consumers. For example, Australia's [around] 34pc surge in gasoline prices
earlier this year coincided with a near-tripling of electric car sales in April
2026 year-on-year," the IEA said. A weaker car market in China is set to weigh
on global EV sales this year, the IEA said. "For the first time this decade,
electric car sales are expected to stagnate in China compared with the previous
year, even as over 60pc of total car sales are set to be electric, an all-time
high," it said. But there is still potential for further growth outside China,
according to the IEA. Electric car exports from China in January-June almost
matched the level recorded during the whole of 2025. By Caroline Varin Send
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