Increasing Fuel Prices Prompt Shift to EVs in Developing Regions

The conflict in Iran has significantly impacted the global electric vehicle (EV) market, particularly benefiting Chinese automakers. As fuel prices soar, drivers in developing regions are increasingly turning to EVs, despite challenges in charging infrastructure.

The blockade of the Strait of Hormuz has disrupted shipments of crude oil and liquified natural gas, affecting major destinations like Asia and Africa. This situation has accelerated a growing trend toward EV adoption in these areas.

In April, Chinese EV exports reached a record $9.4 billion, with shipments increasing to countries like Australia, Brazil, and regions within Southeast Asia and East Africa. Data from the Chinese Association of Automobile Manufacturers reveals that China exported approximately 435,000 passenger EVs and plug-in hybrids in May, marking an over twofold increase from the previous year.

Rising fuel expenses are driving individuals to switch to EVs for financial savings, while governments in nations such as Laos and Ethiopia support electrification to reduce oil imports and fuel subsidies. However, the rapid growth in EV adoption is ahead of the expansion of charging networks.

“The classic chicken-and-egg problem of what should come first—EV fleet size or charging infrastructure—persists,” said Paul Gong from UBS.

In Southeast Asia, the import of Chinese EVs has seen significant increases in countries like Thailand, Laos, and the Philippines. Laos, for example, has banned fuel-powered vehicle imports for the remainder of 2026 to lower oil import expenses and promote the use of EVs.

African imports of Chinese EVs rose by 130% in 2025 from the prior year, according to data from the Chinese Commerce Ministry. The transport sector poses one of the largest expenses for households across Asia and Africa, with limited public transit and long commutes exacerbating fuel price vulnerabilities.

Mark Wakefield from AlixPartners noted the mounting global interest in EVs as fuel prices increase. Data shows that one in four vehicles sold globally last year was electric, and global sales are forecasted to grow further, reaching 23 million in 2026 and constituting nearly 30% of global vehicle sales.

In Vietnam, automaker VinFast has experienced a 42% year-on-year increase in quarterly revenue, driven by demand from Southeast Asia. Nguyen Thien Bao, a VinFast motorbike user in Vietnam, highlighted the financial savings offered by his EV bike amidst rising fuel costs.

Despite an increase in EV imports, charging infrastructure remains insufficient. In Thailand, approximately 4,600 public charging locations service over 424,000 battery EVs and plug-in hybrids. The Electric Vehicle Association of Thailand states the country has around 12,000 public chargers.

In Indonesia, over 4,500 public chargers have been deployed by state-owned utility PLN. The expansion of EV charging networks is also evident in Africa, where state-owned utilities are undertaking leadership roles.

Ndia Magadagela from Everlectric expresses that utilities recognize the potential of electric mobility as a future source of electricity demand.

South Africa hosts the largest share of Africa’s roughly 2,000 public EV charging stations, with Kenya Power planning to construct 44 charging stations within the next year. Developing markets face obstacles in charging network development, including grid connections and maintenance.

Large Chinese automakers may have limited incentives to build charging networks outside China, while state-owned utilities can help address these challenges by leveraging their ties to national grid planning and electricity pricing strategies.

The importance of robust charging infrastructure to support an expanding EV fleet is emphasized by industry analysts, reflecting the ever-growing demand for electric vehicles worldwide.