IDEAS home Printed from https://ideas.repec.org/p/mag/wpaper/26012.html

War, Oil, and the Demand for Electric Cars

Author

Listed:
  • Omar Martin Fieles-Ahmad
  • Michael Kvasnica

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Victor Libet

Abstract

We study whether the sharp rise in petrol prices following the bombing of Iran on 28 February 2026 affected the short-run demand for battery electric vehicles in EU-27 countries. Using monthly vehicle-registration data and fixed-effects panel regressions, we show that the petrol-price shock increased battery electric-vehicle adoption, in particular in countries with better charging infrastructure and lower charging costs. Our findings suggest that higher fossil-fuel prices can accelerate the transition towards electric mobility.

Suggested Citation

  • Omar Martin Fieles-Ahmad & Michael Kvasnica & Victor Libet, 2026. "War, Oil, and the Demand for Electric Cars," FEMM Working Papers 26012, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    • Handle: RePEc:mag:wpaper:26012
    as

    Download full text from publisher

    File URL: https://www.fww.ovgu.de/fww_media/femm/femm_2026/2026_12.pdf
    File Function: First version, 2011
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fei, Yinxin & Qin, Ping & Chu, Yanlai & Zheng, Huanhuan & Tan-Soo, Jie-Sheng & Zhang, Xiao-Bing, 2025. "Does high gasoline price spur electric vehicle adoption? Evidence from Chinese cities," Energy Economics, Elsevier, vol. 142(C).
    2. James B. Bushnell & Erich Muehlegger & David S. Rapson, 2022. "Energy Prices and Electric Vehicle Adoption," NBER Working Papers 29842, National Bureau of Economic Research, Inc.
    3. Omar Isaac Asensio & Elaine Buckberg & Cassandra Cole & Luke Heeney & Christopher R. Knittel & James H. Stock, 2025. "Charging Uncertainty: Real-Time Charging Data and Electric Vehicle Adoption," NBER Working Papers 33342, National Bureau of Economic Research, Inc.
    4. Arie Beresteanu & Shanjun Li, 2011. "Gasoline Prices, Government Support, And The Demand For Hybrid Vehicles In The United States," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(1), pages 161-182, February.
    5. Diamond, David, 2009. "The impact of government incentives for hybrid-electric vehicles: Evidence from US states," Energy Policy, Elsevier, vol. 37(3), pages 972-983, March.
    6. Gallagher, Kelly Sims & Muehlegger, Erich, 2011. "Giving green to get green? Incentives and consumer adoption of hybrid vehicle technology," Journal of Environmental Economics and Management, Elsevier, vol. 61(1), pages 1-15, January.
    7. Katalin Springel, 2021. "Network Externality and Subsidy Structure in Two-Sided Markets: Evidence from Electric Vehicle Incentives," American Economic Journal: Economic Policy, American Economic Association, vol. 13(4), pages 393-432, November.
    8. DeShazo, J.R. & Sheldon, Tamara L. & Carson, Richard T., 2017. "Designing policy incentives for cleaner technologies: Lessons from California's plug-in electric vehicle rebate program," Journal of Environmental Economics and Management, Elsevier, vol. 84(C), pages 18-43.
    9. Jeremy Dijk & Nathan Delacrétaz & Bruno Lanz, 2022. "Technology Adoption and Early Network Infrastructure Provision in the Market for Electric Vehicles," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(3), pages 631-679, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jeremy Dijk & Nathan Delacrétaz & Bruno Lanz, 2022. "Technology Adoption and Early Network Infrastructure Provision in the Market for Electric Vehicles," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(3), pages 631-679, November.
    2. Zhang, Xiao-Bing & Xu, Jiayi & Zheng, Ying & Sari, Ramazan & Chu, Yanlai, 2026. "Electric vehicle adoption and energy prices: Empirical evidence from four Nordic countries," Energy Economics, Elsevier, vol. 154(C).
    3. Alali, Layla & Niesten, Eva & Gagliardi, Dimitri, 2022. "The impact of UK financial incentives on the adoption of electric fleets: The moderation effect of GDP change," Transportation Research Part A: Policy and Practice, Elsevier, vol. 161(C), pages 200-220.
    4. Fei, Yinxin & Qin, Ping & Chu, Yanlai & Zheng, Huanhuan & Tan-Soo, Jie-Sheng & Zhang, Xiao-Bing, 2025. "Does high gasoline price spur electric vehicle adoption? Evidence from Chinese cities," Energy Economics, Elsevier, vol. 142(C).
    5. Yan, Shiyu, 2018. "The economic and environmental impacts of tax incentives for battery electric vehicles in Europe," Energy Policy, Elsevier, vol. 123(C), pages 53-63.
    6. Nathan Delacrétaz & Bruno Lanz & Jeremy van Dijk, 2020. "The chicken or the egg: Technology adoption and network infrastructure in the market for electric vehicles," IRENE Working Papers 20-08, IRENE Institute of Economic Research.
    7. Azarafshar, Roshanak & Vermeulen, Wessel N., 2020. "Electric vehicle incentive policies in Canadian provinces," Energy Economics, Elsevier, vol. 91(C).
    8. Mekky, Maher F. & Collins, Alan R., 2024. "The Impact of state policies on electric vehicle adoption -A panel data analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 191(C).
    9. Mandys, Filip & Taneja, Shivani, 2024. "Demand for green and fossil fuel automobiles," Transportation Research Part A: Policy and Practice, Elsevier, vol. 190(C).
    10. Roberto Amaral-Santos & Ariaster Chimeli & Joao Paulo Pessoa, 2023. "Natural Gas Vehicles: Consequences to Fuel Markets and the Environment," Working Papers, Department of Economics 2023_07, University of São Paulo (FEA-USP).
    11. Sun, Shanxia & Delgado, Michael & Khanna, Neha, "undated". "Hybrid Vehicles and Household Driving Behavior: Implications for Miles Traveled and Gasoline Consumption," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258502, Agricultural and Applied Economics Association.
    12. Wee, Sherilyn & Coffman, Makena & Allen, Scott, 2020. "EV driver characteristics: Evidence from Hawaii," Transport Policy, Elsevier, vol. 87(C), pages 33-40.
    13. Makena Coffman & Scott Allen & Sherilyn Wee, 2018. "Who are Driving Electric Vehicles? An analysis of factors that affect EV adoption in Hawaii," Working Papers 2018-3, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    14. Yoo, Sunbin & Koh, Kyung Woong & Yoshida, Yoshikuni, 2020. "Are consumers abandoning diesel automobiles because of contrasting diesel policies? Evidence from the Korean automobile market," Energy Economics, Elsevier, vol. 92(C).
    15. Liu, Yizao, 2014. "Household demand and willingness to pay for hybrid vehicles," Energy Economics, Elsevier, vol. 44(C), pages 191-197.
    16. Alberini, Anna & Vance, Colin, 2025. "Policy forces in the German new car market: How do they affect PHEV and BEV sales?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 196(C).
    17. Wee, Sherilyn & Coffman, Makena & La Croix, Sumner, 2018. "Do electric vehicle incentives matter? Evidence from the 50 U.S. states," Research Policy, Elsevier, vol. 47(9), pages 1601-1610.
    18. Hu, Wenhao & Hu, Yang & Gu, Hengyu & Ge, Yifu & Zhai, Guofang, 2025. "From gas to gigawatts: Unpacking the drivers of electric vehicle adoption growth across 336 Chinese cities," Applied Energy, Elsevier, vol. 401(PA).
    19. Yizao Liu, 2018. "The effects of competitors on new product launch and market expansion in the hybrid car market," Empirical Economics, Springer, vol. 55(4), pages 1849-1868, December.
    20. Egnér, Filippa & Trosvik, Lina, 2018. "Electric vehicle adoption in Sweden and the impact of local policy instruments," Energy Policy, Elsevier, vol. 121(C), pages 584-596.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mag:wpaper:26012. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: IT Administrators at FWW (email available below). General contact details of provider: https://edirc.repec.org/data/fwmagde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.