The International Energy Agency said higher fuel prices linked to the conflict in Iran drove record sales of electric vehicles and plug-in hybrids in 50 countries during the second quarter of 2026. The agency raised its forecast for plug-in vehicles to 29% of global new-car sales, compared with an earlier estimate of 28%.
According to the IEA report cited by InsideEVs, the conflict in the Middle East that began on February 28, 2026, and the resulting energy crisis renewed concerns about oil consumption in road transport. The agency said the situation strengthened the case for plug-in vehicles as governments looked for ways to address energy security risks and rising fuel costs.
Automakers sold more than 9 million electric and plug-in hybrid cars worldwide during the first half of 2026. More than 5 million of those vehicles were sold in the second quarter, helping the plug-in market recover from a decline during the first three months of the year.
The rebound occurred while the wider automotive market was contracting. Global vehicle sales fell 5% year over year in the first half of 2026, according to the report. Despite that decline, electric vehicles and plug-in hybrids accounted for 24% of global light-vehicle sales across the six-month period. Strong second-quarter demand nearly offset the plug-in market’s weaker first-quarter performance.
The IEA described the oil shock as the largest supply disruption in history. Countries that depend heavily on imported oil recorded some of the strongest increases in plug-in demand as governments sought to lower fuel import costs. Sales in Australia, India, Brazil, South Korea and Vietnam doubled between March and June compared with the same period a year earlier.
Loveral countries introduced new measures or extended existing policies to encourage electrified vehicle sales. Australia strengthened plug-in vehicle incentives in May and accelerated a curbside charging program. Thailand introduced a loan program for battery-powered vehicle purchases in April, while Vietnam extended lower tax rates for plug-in models through 2030.
France was reported to be close to doubling its public funding for electrification. Spain extended tax deductions covering electric vehicle purchases and charging equipment installations. The IEA also said countries across Southeast Asia, Africa and Latin America had expanded incentives or introduced new support programs after the conflict began.
The global recovery came despite falling sales in the two largest automotive markets. Overall vehicle sales in China declined 20% during the first half of 2026. Sales of new energy vehicles, a category that includes electric vehicles and plug-in hybrids, also fell, although by a smaller margin, as reduced subsidies affected demand.
In the United States, electric vehicle sales remained below the previous year’s level after the Trump administration eliminated the federal EV tax credit and reduced penalties connected to fuel economy standards to zero. The source said these policy changes gave automakers fewer incentives to prioritize electric models over gasoline-powered vehicles. Even so, second-quarter U.S. EV sales reached their highest level since the tax credit expired.
The IEA’s revised outlook indicates that demand outside the United States and China is playing a larger role in global electrification. The agency expects plug-in vehicles to represent 29% of new-car sales, supported by policy changes, energy security concerns and efforts by oil-importing countries to reduce exposure to high fuel costs.
