Middle East crisis will boost electric vehicle momentum

According to the report, energy volatility strengthens the tendency to switch to electric vehicles. After a difficult 2025, 2026 first quarter data points to a striking recovery. While battery electric vehicle (BEV) sales increased by 19 percent across Europe, it reached 28 percent in France and 23 percent in Germany.

Allianz Trade, the world's receivables insurance leader, prepares reports addressing the global developments of different sectors at certain periods of the year. According to Allianz Trade, which discussed the effects of the crisis in the Middle East on electric vehicles in its latest report, increasing oil/fuel prices as a result of geopolitical tensions in the Middle East increased electric vehicle (EV) sales on a global scale. It is also included in the report that this acceleration is due to the narrowing of price differences between power transmission system models in automobiles, especially in the main markets, and ongoing subsidy cuts.

According to the report, consumers are more sensitive than ever to energy cost shocks. The report also highlights that fuel costs are again at the top of the list of expenditure items for European households and have a widespread impact on transportation, maintenance and all relevant services across the region. Although the average disposable income has increased in the last 20-30 years, fuel costs have reached up to 8 percent of the average disposable income in France, and experts state in the report that this is even lower in Germany. Allianz Trade economists also include in the report that this situation makes meaningful consumption costs a critical problem, especially for low-income households. It is also among the information in the report that today, the transition to battery electric vehicles (BEV) can be achieved with an average 4-5 percent increase in purchasing power per capita in Western Europe, with financial energy savings, and an energy cost difference of up to 5-7 percent in periods of price volatility. 

It is possible to make the current momentum sustainable

According to the report, four important policies need to be followed in order for the current battery electric vehicle momentum to evolve into a sustainable energy transformation. The first of these is shown in the report as increasing local battery production, the second as creating an adequate electricity network infrastructure, the third as implementing effective carbon pricing mechanisms, and the fourth as implementing stable incentive policies. And it is emphasized in the report that simultaneous steps should be taken in these basic policies. In addition, positive structural progress signals, such as overcoming psychological barriers with battery ranges of >500 km and faster charging times, are cited as promising developments in the report. According to the Allianz Trade report; Europe remains significantly dependent on China's dominance in battery and powertrain technologies. On the other hand, infrastructure deficiency is increasingly turning into a structural problem. Another data in the report is; As of the first quarter of 2026, most of the 1.1 million charging points in Europe are located in only four countries, and the current level is far from the 3.5 million target predicted by the European Commission for 2030. 

Battery electric vehicle (BEV) share may reach 70 percent by 2030 

According to the report; With the strengthening of carbon pricing under the EU Emissions Trading System (EU ETS) and the implementation of National Contribution Declarations (NDC), the BEV share can increase from 29 percent to 42 percent; However, this rate remains below the 79 percent estimate required for the Net Zero target. The good news is that battery costs have fallen 93 percent since 2010 and are expected to fall to $60-$70 per kWh by 2030. On the other hand, the report also states that increasing Europe's share of low-carbon electricity production from 70 percent to 80 percent by 2035 could reduce electric vehicle emissions per vehicle by more than 40 percent.