EV Sales Are Booming in Europe With Gasoline at $10 a Gallon

Sales of electric vehicles are surging across Europe as fuel prices approach record highs. Fully electric car registrations jumped 52% in August from a year earlier, Bloomberg reported.

Record growth in the biggest markets

The data, published on September 24 by the European Automobile Manufacturers' Association (ACEA), showed Germany, the region's biggest market, up 75% while sales in France more than doubled. Overall registrations rose 5.3% in August, and through the first eight months of the year more than one in three vehicles sold in Europe had a plug.

Gasoline at $10 a gallon

The main driver of EV demand is the rising cost of running combustion engines. The US-Israeli war on Iran is disrupting tanker traffic through the Strait of Hormuz, pushing the average price of a litre of gasoline in Germany to a record 2.31 euros, or about $10 a gallon. Diesel is even more expensive, as Ukrainian strikes on Russian refineries crimp supplies.

"Getting an EV no longer is a technology choice, it becomes an economic one," said Xavier Chardon, head of Stellantis NV's Citroën brand.

In Germany, charging a mid-range EV at home costs about 70% less than fueling a gasoline car, according to analysis by comparison site Verivox.

Pain for manufacturers and Chinese competition

For Europe's established carmakers, the long-awaited boom comes with a sting. Stellantis booked a 25.4 billion-euro writedown last year, and Volkswagen is doubling global job cuts to 100,000 and slashed its profit forecast on a sharp contraction in China.

Chinese brands keep gaining ground: BYD's Dolphin Surf starts at 22,990 euros and the company offers buyers in Italy discounts of up to 11,600 euros. Figures from Dataforce showed Chinese brands took a record share of nearly 12% of new-car sales in Europe in August.

Governments and politics

Record pump prices are reshaping political agendas. Germany's federal and state governments agreed a 2.5 billion-euro relief package for motorists and businesses, and German drivers below an income threshold can get up to 6,000 euros off an EV.

In France, fears are growing that the cost-of-living crisis could trigger unrest like the 2018 "yellow vest" protests; fishermen blockaded several ports on the Mediterranean coast. "Drivers are no longer filling up their tank completely," said gas station owner Jacques Vaysse. "There will be a social fallout unless the government cuts fuel taxes."