As oil prices surge, demand for electric vehicles is experiencing a "gradual" shift. Will European and American automakers' "return to internal combustion engines" come to a sudden halt?

Zhitong Finance APP reports that as the Middle East crisis continues to spread, analysts say this will drive car consumers to shift from traditional internal-combustion vehicles to electric vehicles, but early signs show that this transition will be gradual. The Iran war has seriously disrupted oil exports via the strategic chokepoint of the Strait of Hormuz—through which the world typically carries about one-fifth of its oil and liquefied natural gas (LNG). This not only exposes the depth of global dependence on vulnerable fossil-fuel trade routes, but also, due to a surge in oil and gas prices, hits energy markets and triggers widespread inflation concerns.

Since the war began in late February, car sales platforms across the US and Europe have reported that consumer interest in electric vehicles has risen significantly. The emergence of this new trend comes as a large portion of the traditional auto industry is once again shifting toward internal-combustion vehicles. Online car marketplace Autotrader reported on March 26 that since the Iran war broke out on February 28, the number of inquiries about buying new electric vehicles has jumped 28%, and inquiries about buying used electric vehicles have also increased by 15%. On March 25, Octopus Electric Vehicles, a company specializing in electric vehicles, said that since the conflict began, inquiries for electric-vehicle rentals have grown by 36%.

However, Ford (F.US), General Motors (GM.US), and Jeep’s parent company Stellantis NV (STLA.US) have all adjusted their electric-vehicle strategies, recording impairment charges and restructuring costs totaling billions of dollars, partly because consumer demand has weakened and the political environment has changed. JATO Dynamics senior adviser Steffen Michulski pointed out that although the situation is still evolving, the impact of the Iran war has clearly pointed to changes in electric-vehicle demand.

Given that the spike in oil prices has significantly increased operating costs for conventional gasoline cars, it has become more appealing for drivers with higher mileage to own a pure electric vehicle (BEV). Michulski said switching to electric vehicles may also provide households with additional energy-independence assurance, but he also cautioned against “over-simplifying” the situation. He noted that if inflation and supply-chain costs continue to rise, the overall economic environment may become weaker, and these broader pressures will affect all powertrains—whether electric or gasoline.

Michulski concluded: “In short: yes, elevated oil prices and renewed attention to energy security may boost demand for pure electric vehicles in the medium term, but this should be seen as a gradual shift rather than an all-out market acceleration. Electricity-price risk, advances in fuel technology, and broader economic uncertainty are counterbalancing factors.”

Considering an increase in the number of people buying electric vehicles

Cox Automotive’s senior director of economic and industry insights, Erin Keating, said higher gasoline prices may prompt more consumers to consider pure electric vehicles, but the shift in purchasing behavior from gasoline cars to electric vehicles could be slow. Cox expects it would take maintaining high oil prices for more than six months to significantly change consumers’ electric-vehicle buying habits. Keating emphasized that obstacles such as cost, charging infrastructure, and range anxiety (worrying that an electric vehicle could lose power mid-journey) still remain.

Based on Cox data, the average price of new electric vehicles in the US in the first quarter was $55,300. Although this is lower than the quarterly levels in recent years, it is still higher than the average price of $48,768 for non-electric vehicles. Despite the rise in oil prices, electric-vehicle sales in the US have remained sluggish; Cox forecasts that first-quarter electric-vehicle sales will fall 28% to 212,600 units.

However, electric-vehicle sales, including both electric vehicles and hybrid vehicles, have continued to grow because automakers are shifting their focus from pure electric vehicles to hybrid vehicles, seeking a compromise solution to meet consumers’ expectations for fuel economy. Cox said vehicles electrified with hybrids—led by Toyota hybrids—are expected to account for 26% of new-vehicle sales in the first quarter, a record high.

Early data from Edmunds.com, a brand of CarMax, showed that higher gasoline prices have driven more car shoppers to consider electrified vehicles. Edmunds stated: “Fuel costs have long influenced consumers’ choice of their next car, because it is the most intuitive component of driving costs. But whether the recent spike in oil prices translates into a substantive electrification shift depends more on consumers’ expectations that fuel costs will stay high than on oil prices themselves.”

Faster shift?

In Europe and Asia, the energy shock triggered by the Iran war is expected to drive electrification more deeply than past fossil-fuel crises.

Julia Poliscanova, senior manager for the vehicle and electric mobility supply chain at the European non-governmental organization Transport & Environment (T&E), said: “We are discussing electric vehicles again, as if we didn’t know this is a structural measure to get transportation systems off oil—which is indeed frustrating. But this crisis may be different. In past crises, we returned to normal fairly quickly, with oil and gas supplies flowing again. This time, damage to parts of Middle Eastern energy infrastructure means energy supply recovery may take years.”

An analysis released by the organization this month shows that electric vehicles have started to reduce the EU’s oil imports. The nearly 8 million electric vehicles in the EU in 2025 are expected to save about 46 million barrels of oil for the bloc—equivalent to avoiding nearly 3 billion euros ($3.45 billion) in oil import costs.

Meanwhile, in the context of the Middle East conflict, the analysis pointed out that the exposure of gasoline-car owners to risks from rising fuel prices is expected to be five times that of electric-vehicle owners.

Poliscanova also said that the driving force behind electrification growth in Asian markets such as Vietnam, Thailand, and Indonesia comes from affordable models introduced by Chinese automakers, and these economies may accelerate their move away from fossil fuels.

Poliscanova said: “We may see some of these economies move away from oil faster. That means that what we’re discussing today in Europe—things like biofuels and hybrid cars—really looks foolish and out of touch with reality.”

A spokesperson for the European Commission declined to comment on the matter.