Why is the War in Iran Driving Sales in Electric Vehicles?

The war in Iran that began on 28 February created substantial disruptions across global supply chains, with the closure of the Strait of Hormuz, the world's most active oil shipping channel, triggering a cascade of logistics challenges.

With crude oil at US$113.53 per barrel, the conflict has exposed vulnerabilities in traditional fuel supply networks while simultaneously highlighting the relative resilience of electric vehicle infrastructure.

This disruption could reshape manufacturing priorities as automakers navigate volatile energy markets and shifting consumer demand patterns.

The closure of the Strait of Hormuz has halted a critical artery in global oil distribution, sending shockwaves through supply chains dependent on petroleum-based logistics, affecting everything from shipping costs to manufacturing operations.

Google Trends data indicates that searches for EV models and used EVs reached unprecedented levels following the 28 February conflict start, suggesting consumers may be responding to supply chain instability in traditional fuel markets.

Manufacturing cost implications

The current energy crisis has created divergent cost structures for vehicle operation that could influence manufacturing strategies. According to data from Transport and Environment (T&E), driving a petrol car is expected to cost around US$162 per month in the current climate, compared to US$76 for an EV.

The expected crisis premium would add US$44 per month for petrol cars but only US$8 for EVs, meaning petrol drivers are expected to be five times more exposed to energy price shocks.

Jan Rosenow, Professor of Energy and Climate Policy at Oxford University, says in a post on LinkedIn: "Electric cars are expected to be far cheaper to drive during the coming energy crises. In these times of high oil prices, driving a petrol car in Europe is expected to cost around €140 ($162) per month, compared to €65 ($76) for an EV."

These cost differentials could influence production planning across the automotive sector. T&E suggests that a weaker automotive package for EU electrification targets could increase oil imports by 640 million barrels between 2026 and 2035, costing Europe €45bn (US$52bn) in additional oil import expenses. This figure represents substantial supply chain exposure to geopolitical risk.

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Logistics disruption and consumer response

The Strait of Hormuz closure has disrupted traditional fuel distribution networks, creating supply constraints that ripple through transportation and logistics sectors. Consumers may have taken note that electricity supply chains remain comparatively stable, with charging costs staying far lower than costs for petrol or diesel despite the crisis.

According to data from the SMMT, EV registrations are up in the UK. February 2026 saw 90,100 total registrations in EVs, compared to 84,054 in the previous year. This uptick could reflect consumer awareness of supply chain vulnerabilities in petroleum distribution versus the relative stability of electrical grid infrastructure.

Google Trends showed that searches for 'chevy ev' and 'equinox ev' both rose more than 30% in the US since the conflict began, suggesting consumers may be reassessing their dependence on oil-based supply chains.

Production adjustments and market uncertainty

Despite growing interest, manufacturers face complex supply chain considerations in scaling EV production. McKinsey research indicates that EV uptake is likely to continue to grow across regions. In China, 45% of respondents to a survey state that their next car will be a BEV; this compares with 23% in Europe and 12% in the United States.

However, the growth in the sector has not been fast enough for some manufacturers who cite less than anticipated demand from consumers and ongoing regulatory uncertainty in the US and across the world as reasons for cancelling or adjusting EV releases and sales targets.

BMW, Porsche, Rolls-Royce, Ford and Mercedes are among some manufacturers who have adjusted their production of EVs between January and March 2026.

The current supply chain disruption caused by the Iran conflict adds another layer of complexity to manufacturing decisions. If traditional fuel prices remain elevated due to logistics bottlenecks, manufacturers may need to recalibrate production strategies to meet shifting demand patterns driven by supply chain instability in petroleum markets.

In a crisis that has exposed vulnerabilities in oil distribution networks, the resilience of alternative energy supply chains matters even more to both consumers and manufacturers navigating uncertain market conditions.