Fuel Prices Spark Global Demand for Electric Vehicles Amid Ongoing Conflict
The ongoing conflict in Iran and Ukraine's strikes on Russian oil refineries have led to record-high fuel prices worldwide, driving up demand for electric vehicles (EVs).
According to Benchmark Mineral Intelligence, global sales of new energy vehicles increased by 4% year-on-year from January to August. However, the numbers mask significant regional differences.
In the United States, EV sales fell by 33% in August compared to last year, while over eight months they declined by 21%. The decline is attributed to President Donald Trump's cancellation of the subsidy program introduced by his predecessor, which led U.S. automakers to return to conventional engine models and cancel planned investments in EVs and battery supply chains.
In contrast, European sales rose by 36% year-on-year in August and by 29% since the beginning of the year, driven by expensive fuel prices and government support programs. Wood Mackenzie analysts believe that Chinese battery electric vehicles have reached parity with internal combustion engine vehicles in terms of total cost of ownership.
The accelerated transition to EVs could put pressure on copper, lithium, and nickel supplies. Under Wood Mackenzie's scenario, additional demand for copper would be 2% higher compared to the baseline forecast, while annual commissioning of new mining capacity would need to increase from an average of 850,000 tonnes in 2025-2040.