Impact of Iran War on Global Electric Vehicle Market

The conflict in Iran has significantly influenced the global electric vehicle (EV) market. Chinese automakers are gaining momentum in developing regions as rising fuel prices drive a shift towards EVs. While the transition accelerates, charging infrastructure remains inadequate compared to EV imports.

Disruption in Oil and Gas Shipping

The blockade of the Strait of Hormuz has affected about a fifth of the world’s crude oil and liquified natural gas shipments. Asia, as the primary fuel destination, felt the impact first, followed by Africa. This disruption hastened an existing trend towards EV adoption in developing markets.

Rise in Chinese EV Exports

In April, Chinese EV exports reached a record $9.4 billion, according to Ember, based on Chinese customs data. Shipments increased to areas like Australia, Brazil, Southeast Asia, and East Africa. By May, China exported approximately 435,000 passenger EVs and plug-in hybrids, over twice the previous year’s numbers, reported the Chinese Association of Automobile Manufacturers.

As fuel costs soar, drivers are more inclined to opt for EVs. Governments from Laos to Ethiopia are promoting electrification to cut oil imports and decrease fuel subsidy expenses.

Charging Infrastructure Behind Demand

Despite the rise in EV imports, the development of charging networks has not kept pace. In Africa, state-owned utilities are leading the construction of charging stations, a model that might aid other markets in reducing reliance on fossil fuels.

Paul Gong, head of UBS bank’s China automotive industry research, described the challenge as a “classic chicken-and-egg problem,” where government intervention in infrastructure could expedite adoption.

Shifting Consumer Preferences in Asia and Africa

In Southeast Asia, the influx of Chinese EVs has surged in Thailand, Laos, and the Philippines. Laos has prohibited fuel-powered vehicle imports for the remainder of 2026 to lower oil import costs and foster the EV transition.

Africa witnessed an importation of around 44,000 Chinese EVs in 2025, marking a 130% increase from the previous year, based on Chinese Commerce Ministry data. Transportation remains a major household expense in Asia and Africa, making residents susceptible to fluctuating fuel prices.

One out of every four cars sold globally last year was electric, per the International Energy Agency (IEA). Global EV sales are predicted to rise, reaching 23 million in 2026, comprising nearly 30% of all vehicle sales. Jerry Gan, CEO of Geely Auto, declared plans to boost international expansion in the coming years.

Challenges in Infrastructure Development

While EV imports continue to grow, the gap in charging infrastructure persists. Thailand offers approximately 4,600 public charging sites, serving over 424,000 battery EVs and plug-in hybrids. The Electric Vehicle Association of Thailand highlighted this shortage with about one charger for every 92 vehicles.

In Vietnam, VinFast recorded higher sales, with regional demand contributing to a 42% rise in quarterly revenue. However, drivers like Nguyen Thien Bao have found EV bikes to be economical amid rising fuel prices.

In Malaysia, fast charger availability increased over 70% in 2025 due to government tax incentives for operators meeting specific investment criteria. Ethiopia, which banned non-EV imports, had only about a dozen charging stations in mid-2025, compelling the construction of more to match the increasing demand.

The Role of State Utilities in Charging Infrastructure

State-owned utilities in Africa are increasingly responsible for building EV charging networks, intending to resolve one of the major barriers to electric vehicle adoption.

In Indonesia, the state-owned power utility PLN has deployed over 4,500 public chargers. Ndia Magadagela, co-founder and CEO of Everlectric, notes that utilities recognize the potential of electric mobility as a notable source of future electricity demand.

South Africa leads Africa with nearly 2,000 public charging stations. Kenya Power, the state-controlled utility, plans to establish 44 charging stations in the following year.

Chris Liu of advisory group Omdia indicates that building charging networks presented challenges in developing markets due to issues surrounding grid connectivity and maintenance.

Gong, from UBS, emphasized the necessity of infrastructure to support an increasing number of EVs, underscoring the vital role of state-owned utilities in this context.