Traditional gasoline-only passenger cars fell below half of new vehicle purchases for the first time on record during the first half of 2026. Soaring fuel costs, driven primarily by energy supply disruptions in the Strait of Hormuz, pushed the global market share of internal combustion engine vehicles down to 49 percent, according to data from analytics provider Mobility Global reported by Nikkei Asia.
Between January and June, sales of gas-powered automobiles excluding hybrids slumped 10 percent year-over-year to 20.25 million units. This sharp decline marks a rapid acceleration from previous years, during which gasoline cars held a 73 percent market share as recently as 2021.
The Catalyst: Strait of Hormuz Crisis and $100 Crude
The market shift accelerated alongside Middle East energy supply disruptions and crude oil prices hovering around $100 a barrel. Tanker traffic restrictions through the Strait of Hormuz triggered severe volatility in global petroleum markets, with benchmark Brent futures spiking significantly during the spring months.
As crude supply tightened, retail pump prices surged to historic highs across major global economies. In Germany, Europe’s largest car market, gasoline prices reached an all-time high of 2.31 euros per liter-equivalent to approximately $10 per gallon. Similar fuel price pressures were felt across South America, Asia-Pacific, and other European nations, prompting motorists to seek alternatives with lower running costs.
Regional Variations in EV Adoption and Sales
The transition away from gasoline-only vehicles varied widely by geographic region, influenced by local policy shifts, regional pricing pressures, and established consumer trends:
- Europe: European battery electric vehicle (BEV) sales surged. Driven by record fuel costs, BEV sales across 31 major European countries climbed 32 percent to 1.81 million units in the first half of the year. In Germany, pure BEV sales jumped 75 percent in August alone, with one in every three passenger cars sold that month being fully electric.
- Asia-Pacific: EV sales in Southeast Asia jumped 81 percent year-over-year to 350,000 units, while Oceania markets saw sales surge 2.2-fold to 110,000 units. Meanwhile, China maintained its dominant position despite a 3 percent dip to 3.44 million units following the scaling back of local tax breaks in January.
- North America: EV sales in North America declined by 15 percent following policy adjustments and the withdrawal of certain preferential federal measures.
Globally, electric vehicle sales rose 12 percent year-over-year to 6.87 million units in the first half, accounting for 17 percent of total new vehicle sales. Hybrids also expanded their footprint, capturing an 18 percent market share with 7.27 million units sold.
Market Outlook and Industry Challenges
Analysts note that while the fuel price shock successfully altered short-term purchasing patterns, long-term durability depends heavily on geopolitical stabilization in the Middle East. If crude prices retreat and shipping lanes in the Strait of Hormuz reopen durably, market pressures easing back toward historical norms could test the resilience of organic EV demand.
“The pace of EV adoption slowed from around 2024 as subsidies ended, and hybrid vehicles grew in their place, but high oil prices are bringing renewed attention to the low running costs of EVs,” said Yoshiaki Kawano, an analyst at Mobility Global. “There are not many cases of EV buyers returning to gasoline cars or hybrids.”
Energy analysts from Wood Mackenzie suggest that prolonged high fuel pricing could permanently push passenger fleet electrification beyond earlier forecasts. However, significant structural challenges remain, requiring billions of dollars in continued investments directed toward critical battery mineral supply chains and expanding public charging infrastructure.
