The Iran war that began February 28, 2026 has materially disrupted oil and LNG exports through the Strait of Hormuz, the chokepoint for roughly one-fifth of world supply. The resulting spike in crude and gasoline prices has immediately re-priced the total cost of ownership for internal-combustion-engine (ICE) vehicles and reignited inflation fears across energy markets.
Car-selling platforms are already registering clear demand signals: Autotrader reported a 28% increase in new-EV inquiries and 15% rise in used-EV inquiries since late February; Octopus Electric Vehicles saw leasing inquiries jump 36%. JATO Dynamics and DVx Ventures analysts frame this as a mid-term BEV tailwind for high-mileage drivers seeking both lower running costs and greater energy independence.
Yet the legacy auto sector is moving in the opposite direction. Ford, General Motors and Stellantis have collectively booked tens of billions in write-offs and restructuring charges, citing tepid consumer uptake and shifting political winds. US EV sales are forecast to fall 28% in Q1 2026 to just 212,600 units. Average new-EV transaction prices remain $55,300 versus $48,768 for non-EVs, and persistent barriers — charging infrastructure, range anxiety, and electricity-price risk — continue to cap acceleration. Instead, hybrids (led by Toyota) are capturing a record 26% of new-vehicle sales as OEMs pivot to the perceived “compromise” powertrain.
Analysts caution the shift will be gradual rather than abrupt. Cox Automotive notes that gas prices must stay elevated for six months or longer before translating into measurable buying behavior. Broader economic softening from sustained inflation could blunt demand across all powertrains.
In Europe and Asia the calculus differs. Transport & Environment quantifies that the EU’s existing 8 million EVs will already avoid 46 million barrels of oil imports in 2025 (≈€3.45 billion in import costs), leaving petrol drivers five times more exposed to price spikes. With potential multi-year damage to Middle East infrastructure, the current crisis lacks the quick “business-as-usual” rebound of prior shocks. Asia’s emerging markets — Vietnam, Thailand, Indonesia — are positioned for even faster decoupling, courtesy of low-cost Chinese EV supply. The net result is a bifurcated global response: US OEMs doubling down on ICE/hybrids while Europe and Asia accelerate the structural exit from oil.
The story is therefore not “EV demand is back” in a simple cyclical sense. It is a geopolitical reminder that transport remains uniquely vulnerable to fragile fossil-fuel logistics, even as the industry’s largest players are currently betting the other way.
// Share Your Analysis