Iran conflict accelerates global shift toward electric vehicles

Donald Trump's decision to begin a war with Iran this year has accelerated global efforts to electrify energy systems and move away from fossil fuels.

The conflict has caused fuel prices to rise sharply worldwide, prompting countries to seek energy sovereignty by reducing reliance on imported liquid fuels. Experts suggest the situation serves as a tipping point because modern consumers now have affordable electric alternatives.

The cost of installed solar power and batteries has dropped by 90 per cent since 2010, making domestic electricity generation more economically viable than importing oil. In Asia, emerging markets are experiencing a surge in electric vehicle sales. Vietnam, Singapore, Thailand, and Indonesia are seeing rapid adoption, with some countries taking direct action to ban internal combustion engine imports. In Europe, battery electric car sales reached record levels, including a 37 per cent market share in Germany during October.

While the United States saw a decline in electric vehicle sales as automakers pivoted back to internal combustion engines following the 2024 election, other regions are moving faster toward electrification. Anna Freeman of the Energy Efficiency Council reports that the global oil and gas bill could exceed $US5 trillion this year due to the crisis. She notes that while the current crisis adds a $US1.2 trillion price premium, a net zero energy transition could cost $US3.5 trillion per year.

Despite these shifts, coal, oil, and gas still provide about 60 per cent of the world's final energy.