High Oil Prices Are Driving an EV Boom in Europe
More Than 60 Million Barrels of Oil Ready to Head to Asia as Hormuz Reopens The breakthrough surpasses South Korea's… What I Cover Irina Slav has been writing about global energy markets since 2007, covering the oil and gas industry, energy security, commodities, and the… High oil and fuel prices led to yet another monthly rise in electric car sales in Europe, at a solid 34% on the year, thanks in no small part to the wider availability of cheaper vehicles from China, Reutersreportedtoday, citing data from E-Mobility and New Automotive.
Yet, European carmakers are also seeing higher demand for their electric models, with Renault reporting a 50% increase in its EV order book, per Reuters.
However, the chief executive of the French major cautioned that this could change quite quickly when oil prices come down, casting a shadow over the long-term sustainability of demand for electric vehicles despite government subsidies.
Renault’s Francois Provost was not the only one cautioning against too much EV demand optimism.
Ford’s head for European operations also said the surge in demand was likely transitory, according to Reuters.
While he noted “increased customers' interest”, Jim Baumbick said this should not be assumed to be a long-term trend.
European EV sales recorded an increase of the same size, 34%, for April as fuel prices rose on the energy crunch triggered by the Strait of Hormuz closure.
Now, however, prices are significantly lower, which may lead to weakening demand for EVs.
Indeed, the April and May sales increases are smaller than what European markets saw in March—the first month of the closure—when EV sales soared by 51% on the year.
EV sales growth over the first quarter of the year stood at 33.5%.
“Consumer interest in EVs is clearly stimulated by low-cost, very good Chinese cars arriving on the market,” one former Nissan executive said, as quoted by Reuters.
Indeed, demand for Chinese EVs appears especially strong—and so is demand for second-hand EVs, according to the sales data.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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