Global electric vehicle sales surge 35 percent as Middle East war lifts fuel prices

Global electric vehicle sales rose 35 percent in the second quarter of 2026 compared with the first three months of the year, setting quarterly records across 50 countries as higher fuel prices driven by the Middle East conflict encouraged consumers to switch to battery-powered vehicles, according to the International Energy Agency.

The IEA said the sharp increase reflected the energy crisis triggered by the conflict in the Middle East. Crude oil prices climbed from about $60 per barrel at the start of the year to nearly $120 after Iran effectively closed the Strait of Hormuz following Israeli and US strikes in February. The strategic waterway normally carries around one fifth of the world’s oil supply.

Despite difficult conditions for the global automotive industry, the agency said the energy crisis highlighted the volatility of fuel prices and reinforced the appeal of electric vehicles. With road transport accounting for nearly half of global oil consumption, the IEA said electric mobility has become a key policy option for countries seeking to strengthen energy security while shielding consumers and businesses from oil price shocks.

More than 90 countries recorded year-on-year growth in electric vehicle sales during the first half of 2026. Europe posted the strongest regional performance, with sales increasing by more than 30 percent. Australia, Brazil, India, South Korea, and Vietnam also reported solid gains. Several Southeast Asian economies that rely heavily on imported oil introduced temporary tax incentives to encourage electric vehicle purchases.

China remained a major driver of international growth. Chinese electric vehicle exports jumped 65 percent year over year during the second quarter. According to Energy Intelligence, exports of China’s low carbon energy products, including batteries, solar panels, and electric vehicles, increased 60 percent during the first half of 2026 to reach $143 billion. However, domestic electric vehicle sales in China are expected to stagnate for the first time in a decade as the country’s broader automotive market slows.

The United States followed a different trajectory. Demand for electric vehicles fell sharply after the Trump administration eliminated federal electric vehicle tax credits in September 2025 and relaxed fuel economy standards, reducing financial incentives for consumers.

The strong second quarter prompted the IEA to raise its outlook for the year. The agency now expects electric vehicles to account for 29 percent of all new cars sold worldwide in 2026, one percentage point higher than its May forecast. While the overall global automotive market is expected to contract, the IEA projects electric vehicle sales will grow by 10 percent over the full year.