High fuel prices spur global demand for electric vehicles — Cyprus Mail
High prices for gasoline and diesel fuel amid the war in Iran are stimulating demand for electric vehicles in different regions of the world. Economic considerations are increasingly influencing buyers’ choices alongside government subsidies and environmental motives, Cyprus Mail reports.
Different market dynamics
According to consulting company Benchmark Mineral Intelligence, global sales of new energy vehicles increased by 4% year-on-year in January–August. At the same time, the overall figure conceals significant differences between regions.
In the United States, electric vehicle sales in August fell by 33% compared with the same month last year, while over eight months they declined by 21%. The publication links this to President Donald Trump’s cancellation of the subsidy program introduced by his predecessor. U.S. automakers have returned to models with conventional engines and cancelled some planned investments in electric vehicles and battery supply chains.
In China, electric vehicle sales declined by 12% in January–August, but amid the overall downturn in the automotive market, this segment remains relatively resilient. The share of new energy vehicles in sales reached 65%, while Chinese companies are increasing exports of electric vehicles.
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Rising demand and metals
In Europe, electric vehicle sales rose by 36% year-on-year in August and by 29% since the beginning of the year. Cyprus Mail attributes this trend to expensive fuel and government support programs. In countries outside the United States, China and Europe, electric vehicle sales have doubled since the beginning of the year.
Wood Mackenzie analysts believe that battery electric vehicles in China have already reached parity with internal combustion engine vehicles in terms of total cost of ownership. In their assessment, cheap Chinese exports and the high cost of gasoline are narrowing the price gap in other Asian markets as well.
An accelerated transition to electric transport could increase pressure on supplies of copper, lithium and nickel. Under Wood Mackenzie’s scenario, additional demand for copper would amount to 2% compared with the baseline forecast, while annual commissioning of new mining capacity would need to increase from an average of 850,000 to 960,000 tonnes in 2025–2040. Demand for lithium under this scenario would be 14% higher, while its supply is complicated by China’s dominance in the global supply chain.
According to the publication’s assessment, the longer the war in Iran lasts and the longer Ukraine strikes Russian oil refineries, the more likely the accelerated transition to electric transport scenario modeled by Wood Mackenzie becomes.
