KATHMANDU: Rising fuel prices linked to the Iran war are accelerating electric vehicle sales worldwide. The trend is also putting further pressure on diesel-powered passenger cars in Europe.
According to the European Automobile Manufacturers’ Association, EV sales in the European Union (EU) increased 63% to 196,486 units in August. Electric cars accounted for 28% of the market during the month.
In contrast, sales of new diesel cars fell by nearly 25% to 45,403 units. Diesel vehicles accounted for just 6% of the EU’s new car market.
The growth in EV demand is also spreading to Southeast Asia and Latin America. Even the US market is showing early signs of recovery following a period of weaker sales.
Higher fuel costs are a major factor behind the shift. Diesel prices in European and US wholesale markets reached USD 220 per barrel last month, more than double their level before the Iran war began in February. The International Energy Agency has also warned of a global diesel shortage lasting until mid-2027.
Volvo Cars Chief Commercial Officer Erik Severinson said rising fuel costs and uncertainty over resale values were making diesel vehicles less attractive to buyers.
Stellantis CEO Antonio Filosa said diesel engines would remain relevant for some time. However, he acknowledged that their applications were becoming limited, particularly outside trucks and commercial vehicles.
Renault is also moving away from diesel passenger cars in Europe. The company expects small vans and commercial vehicles to follow as electric alternatives become cheaper and fast-charging infrastructure improves.
Renault CEO François Provost said businesses operating diesel-powered van fleets were struggling to manage fuel costs. He added that the possibility of future price increases was encouraging companies to consider electric alternatives.
Despite the decline in new diesel car sales, diesel remains widely used across Europe. According to environmental organization Transport & Environment, around 40% of cars on European roads still run on diesel.
The latest developments highlight how fuel-price volatility is influencing vehicle-buying decisions. Carmakers are increasingly focusing on electric models as consumers and businesses look for alternatives to rising petrol and diesel costs, writes FT.
