German EV sales rise as fuel prices jump amid Iran tensions

Electric vehicle registrations in Germany rose 20% in May as gasoline and diesel prices surged to record highs, data from the country's automotive authority showed on Monday.

The Federal Motor Transport Authority (KBA) reported 52,412 new EV registrations last month, up from 43,654 in May 2023. The increase coincided with a sharp rise in fuel prices, which reached all-time peaks in Germany amid escalating tensions in the Middle East and concerns over potential disruptions to oil supply from Iran.

Average gasoline prices in Germany climbed to €1.95 per liter ($7.40 per gallon) in May, while diesel prices reached €1.88 per liter ($7.12 per gallon), according to market data. Analysts attributed the price surge to geopolitical risks in the Strait of Hormuz, a critical chokepoint for global oil shipments, and broader supply chain constraints.

The shift toward EVs reflects broader trends in Europe, where governments have accelerated incentives to reduce carbon emissions and dependence on fossil fuels. Germany's federal subsidy for electric cars, introduced in 2016 and expanded in subsequent years, has played a key role in driving adoption. The program offers up to €4,500 ($4,860) in purchase incentives for battery-electric vehicles.

Industry analysts noted that while EV sales growth has been robust, infrastructure remains a hurdle. As of May, Germany had approximately 120,000 public charging points, a figure that has grown rapidly but still lags behind demand in urban areas. The government has pledged to expand the network to 1 million charging points by 2030.

The European Union's 2035 ban on new internal combustion engine sales further underscores the long-term structural shift toward electrification. Automakers including Volkswagen, BMW, and Mercedes-Benz have accelerated their EV production plans to align with the regulatory timeline.

The data highlights the interplay between energy prices, geopolitical risks, and policy measures in shaping consumer behavior and industry trends in one of Europe's largest automotive markets.