Global Autos: EV demand – push vs pull

Research evidence excerpt

20 August 2026

Global Autos

Equities

Automobiles

EV demand – push vs pull

Global

◆ Europe’s EV growth is structural, not just a side-effect of fuel

price spikes and incentives

◆ Purchase and/or taxation incentives can directly accelerate and

help shape EV demand

◆ EV adoption continues to rise, but margin dilution is a

pressure point for OEMs – cost savings should help

The debate about electrification rages on. Spiking demand in Europe is contrasted by

collapsing demand in the US and a plateau (albeit temporary) in China. Is the future still

electric? Yes, but we are not yet past the point of no return. Government support (e.g.

incentives) is required to help push countries onto the steeper parts of their EV adoption

S-curve. This is especially pertinent in the context of regulation push back (e.g. UK ZEV

mandate). Will demand weaken when/if oil prices “normalise”? We think rising fuel pump

prices are supportive of EV economics, but not enough to create a seismic drop-off in

adoption by itself (see Middle East Conflict – to EV or not to EV (01-Apr-26)).

Alice Martin*

Global Autos Analyst

HSBC Bank plc

Michael Tyndall*, CFA

Senior Global Autos Analyst

HSBC Bank plc

Pushkar Tendolkar*

Global Autos Analyst

HSBC Securities and Capital Markets (India) Private

Limited

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations

High fuel prices are a tailwind, but not the whole story. Europe is developing a

supportive environment for EVs, to which higher fuel prices play a role: (1) OEMs are

bringing smaller (and more affordable) EVs to market, (2) fuel costs are narrowing versus

ICE, but charging location (home vs public) matters, and (3) government incentives are

helping to accelerate demand. In other parts of the world potential fuel shortages vis-à-vis

high energy import exposure is driving a spike in EV demand (e.g. Australia).

When governments support (or don’t support) EV adoption, demand responds.

Purchase incentives of up to EUR14k across Europe’s Big 5 are supporting robust

growth, e.g. Germany BEV sales +c50% YTD-Jul, France BEV sales +70% YTD.

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