BMW: High petrol prices driving surge in EV demand

BMW says the spike in global oil prices triggered by the conflict between the United States, Israel, Iran and other Gulf countries is driving surge in EV demand, including in Australia. Feedback from local dealers has rapidly reached the highest levels of BMW management in Germany after retailers reported demand for EVs has risen sharply in recent weeks, so much so the brand is now looking to boost production of the new iX3.

Restricted oil tanker movement through the Strait of Hormuz because of the war between the United States and Iran has skyrocketed the price of petrol and diesel in Australia (and other markets), triggering panic buying of fuel.

The sudden shift appears to have had an immediate impact on EV demand.

“We are definitely seeing that in incoming orders and in the foot traffic (to dealers),” BMW Asia-Pacific, Easten Europe, Middle East and Africa regional sales boss Ritu Chandy told carsales.

“I was just in Australia, and last weekend, the Australian dealers said every customer who walked through the door was more interested in a BEV than otherwise.”

Chandy said the trend was not limited to BMW, relaying broader market reports suggesting that other EV brands are also seeing spikes.

“There was really a huge focus in terms of battery electrification, given the dialogue, given the oil prices, given everything that is happening,” she said.

The surge in EV demand comes as Australia experiences fuel supply insecurity, with some of the missing oil from the Middle East replaced by shipments from the United States as a stopgap.

Earlier this week, the federal government halved the fuel excise for three months to reduce prices from averages of around $2.50 per litre for petrol, and $3.00/L for diesel.

Meanwhile, electricity prices have remained steady for now at around $0.30 per kilowatt-hour for household charging and around $0.65/kWh for public charging.

At present, a diesel BMW X3 is costing its owner about $23 in fuel every 100km, while an electric BMW iX3 would cost $6-14 to do the same distance.

While EV charging costs could increase due to inflation, Australia produces its own electricity onshore to power electric cars while petrol and diesel are imported.

BMW says it had planned to increase the volume of EVs it built in 2026, but the current situation may accelerate that trajectory.

The new-generation iX3 mid-sized SUV – the first model on BMW’s Neue Klasse platform – is currently being rolled out globally in stages, with production ramping up.

“We are actually looking at additional capacity for the iX3 given the demand we’ve had,” Chandy said.

“Whether we will be able to capitalise by selling just more iX3s, that is a different story, because we are rolling those cars out, and we have a rollout cadence.”

BMW continues to produce and sell other EVs, including the popular iX1/iX2 small SUVs and the i4 sedan.

The new iX3 is set to launch locally in July 2026, ahead of the new i3 sedan in early 2027, with both models expected to play key roles in BMW’s EV growth strategy.

The sudden spike in EV demand highlights just how quickly external factors, particularly fuel price shocks from conflicts abroad, can reshape new car demand in Australia.

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