A significant rise in fuel prices is driving a rapid increase in electric vehicle (EV) sales globally, while accelerating the decline of diesel-powered cars in Europe, according to auto industry executives. The shift comes amid ongoing disruptions linked to the conflict involving Iran and its impact on energy markets.
In the European Union, EV sales surged by approximately 63-65% in August, reaching nearly 196,500 units, based on data from the European Automobile Manufacturers Association. This growth boosted electric vehicles’ market share to about 28%. Conversely, sales of new diesel cars fell sharply by nearly 25%, with just over 45,000 units sold in the same month, causing diesel’s market share to fall to roughly 6%.
Oliver Blume, chief executive of Volkswagen, Germany’s largest carmaker, described the surge in EV sales as a “breakthrough” in the European market, noting that for many consumers, owning an electric car represents a move toward independence from volatile fuel prices. The trend is not limited to Europe; despite the United States experiencing a dip in EV sales following the end of a $7,500 tax credit for buyers, signs of recovery have emerged, complemented by robust growth in EV demand across Southeast Asia and Latin America.
The resurgence of EV sales in Europe marks a reversal after two years of weaker-than-expected demand. The spike in diesel prices, driven partly by Ukrainian attacks on Russian refineries, has made diesel vehicles less attractive to buyers. Diesel prices recently reached $220 per barrel at the wholesale level—more than twice the price before the Iran war began in February. The International Energy Agency has cautioned that this supply shortage may persist until mid-2027.
Erik Severinson, chief commercial officer of Swedish automaker Volvo Cars, asserted that the era of diesel is coming to an end, pointing to rising fuel costs and uncertainties over the resale value of diesel cars. An unnamed senior executive at an Asian car manufacturer echoed this view, describing diesel's future as effectively over. French automaker Renault, currently phasing out diesel vehicles in Europe, anticipates that the next segment to be affected will be small vans. François Provost, Renault’s CEO, highlighted the difficulty fleet operators face in managing diesel budgets amid soaring fuel prices.
The industry’s evolving dynamics underscore significant changes in consumer preferences and supply challenges, which together are accelerating the transition toward electric mobility in key global markets.