EV demand surge leaves car makers facing months-long waits
A rebound in electric vehicle demand, driven by rising petrol and diesel prices linked to the prolonged Iran war, has caught manufacturers off guard after they scaled back EV programmes. UK EV market share hit 30% in August, prompting warnings against weakening the zero-emission vehicle mandate.
Car manufacturers are confronting a fresh challenge: a surge in electric vehicle demand that many were unprepared for after they rolled back EV programmes and shifted focus back to petrol and diesel models. Buyers of some of the most popular electric cars now face months-long waits, according to reports from Europe, where orders for the Volkswagen Group's new small electric models have blown past original estimates.
The shift marks a sharp reversal from the caution that gripped the industry in recent years. In the early 2020s, Tesla-fuelled predictions of rapid electrification led to ambitious EV plans, but when those forecasts failed to materialise, companies including Porsche, Stellantis, Honda, General Motors and Ford embarked on expensive rollbacks. The mea culpa — «We misread the market and we moved too fast» — became a familiar refrain. Now, the opposite problem is emerging: car makers may have under-read the market as demand grows on the back of the prolonged Iran war.
In the UK, electric vehicles accounted for 30% of new car sales in August. The combined share of EVs and plug-in hybrids overtook that of petrol and diesel cars, a milestone that underscores how quickly consumer preferences are shifting. The momentum is being driven not by the breathless enthusiasm of a niche fanbase, as was the case five years ago, but by real economic pressure: petrol and diesel price increases that would have been politically toxic if they had come from tax rises.
The demand spike has exposed a mismatch between production planning and market reality. Customers for cars such as the Volkswagen ID Polo are reportedly waiting months for delivery, and underestimating demand carries its own costs. Unlike overestimating demand, which leaves manufacturers with expensive idle capacity, under-reading it means buyers turn to competitors. That risk is now playing out in showrooms across Europe.
The situation has intensified the debate over government policy. The UK's zero-emission vehicle mandate, which requires manufacturers to sell a growing proportion of electric cars, has come under pressure from car makers arguing that current profit margins are better for internal combustion engine vehicles. But the industry's short-termist instincts — driven by shareholder expectations — may conflict with its long-term interests. The more EVs that are built in Europe, the greater the economies of scale and the stronger the long-term certainty for manufacturers.
China's car industry offers a instructive example of how state direction can accelerate an industrial transition. While there may be a case for carve-outs for niche V8 engines, additional time for UK factories to prepare, and a longer timeline for electrifying vans, equating shareholder interests with the long-term health of the car industry would be a mistake. Models such as the Renault 5 and the ID Polo have demonstrated that manufacturers can build electric cars that customers genuinely want.
For now, the priority for policy makers should be to hold firm on the zero-emission vehicle mandate rather than water it down. The industry will survive the transition and ultimately grow stronger, but only if it is given the direction to think beyond the current quarter. The risk of under-reading demand is not just lost sales — it is a slower, more costly path to the economies of scale that will determine which manufacturers thrive in the electric era.
