Fuel price hikes due to the Iran war boost electric car sales in Europe

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- Higher fuel prices caused by the Iran war are contributing to increased demand for new and used electric vehicles across Europe, according to data seen by Reuters. However, some executives warn that this demand could decline if gasoline prices fall.

Industry experts say that improvements in electric vehicle charging infrastructure and a wave of affordable models – including some produced by Chinese companies – are helping to make electric vehicles more widespread, thus supporting demand for them.

The United States and Iran agreed to extend the ceasefire, but disruptions to maritime shipping mean that it could take weeks for oil flows through the Strait of Hormuz to return to normal, with fuel prices likely to remain high for several months.

Data provided to Reuters by research group New Automotive and industry group e-Mobility Europe shows that registrations of new electric vehicles rose 34 percent year-on-year in May in 17 markets covering more than 90 percent of car sales in the European Union and the European Free Trade Association.

Fully electric models accounted for nearly a quarter of new registrations in those markets.

Renault CEO Francois Proveau told Reuters last week that the company's order book for electric vehicles had risen 50 percent in some countries since the start of the Iran war at the end of February, but he predicted that growth would "slow down" if fuel prices fell.

Jim Bombeck, Ford's president in Europe, said the war "increased customer interest" in electric vehicles, but cautioned against viewing it as a permanent shift.