Rising fuel prices drive global surge in electric vehicle sales

Global sales of electric vehicles rose sharply during the second quarter of 2026 as soaring fuel prices linked to the conflict in the Middle East encouraged more consumers to switch away from petrol and diesel powered cars, according to a new report by the International Energy Agency.

The agency said electric vehicle sales increased by 35 percent between April and June compared with the first three months of the year. Record sales were reported across 50 countries despite a slowdown in the overall global automobile market.

According to the IEA, the renewed interest in electric vehicles was largely driven by the sharp rise in oil prices following the conflict involving Iran, Israel, and the United States. The report said the resulting energy crisis reminded governments and consumers of the economic risks associated with dependence on imported oil.

Oil prices climbed dramatically during the year after Iran effectively closed the Strait of Hormuz, one of the world’s busiest energy shipping routes, in response to military strikes carried out by Israel and the United States. Crude prices rose from around 60 dollars per barrel at the beginning of the year to nearly 120 dollars, increasing fuel costs around the world and putting additional pressure on households and businesses.

The IEA said the situation has brought energy security back to the centre of government policy discussions. Since road transport accounts for nearly half of global oil consumption, the agency noted that expanding the use of electric vehicles can reduce reliance on imported fuel while protecting consumers from sudden increases in fuel prices.

The report said electric vehicles are now being viewed as an important tool for improving national energy security, particularly in countries that rely heavily on imported oil. By reducing dependence on global oil markets, governments hope to make their economies more resilient during periods of international instability.

Several countries in Southeast Asia that were particularly affected by rising fuel costs responded by introducing temporary tax incentives to encourage people to buy electric vehicles. Similar government support measures have also been expanded in parts of Latin America and Europe as officials seek to accelerate the transition to cleaner transport.

Based on the strong performance in the second quarter and continued policy support in many regions, the IEA expects global electric vehicle sales to increase by around 10 percent over the full year. If that forecast is achieved, electric cars are expected to account for approximately 29 percent of all new vehicle sales worldwide in 2026.

The agency also predicted that the overall global car market will shrink this year, meaning electric vehicles are continuing to gain market share even as total vehicle demand weakens.

The report noted that the year began on a slower pace for the electric vehicle industry. Sales dropped during the first quarter, mainly because of weaker demand in China and the United States, the world’s two largest EV markets.

In the United States, the removal of government subsidies reduced consumer demand, while China’s slowing economy and reductions in financial incentives also affected purchases. Because China represents the largest electric vehicle market in the world, weaker sales there had a significant impact on global figures despite healthy growth in many other regions.

Europe recorded the strongest performance during the first half of the year. According to the IEA, electric vehicle sales across the continent rose by more than 30 percent as supportive government policies, expanding charging infrastructure, and higher fuel prices encouraged more drivers to choose electric cars over conventional vehicles. The agency believes these trends could continue if governments maintain incentives and energy prices remain elevated.