The sprawling Middle East crisis is expected to spur drivers to abandon traditional internal combustion engine vehicles in favor of EVs, analysts told CNBC, although early evidence suggests this will be a gradual gearshift.

The Iran war has severely disrupted oil exports through the strategically vital Strait of Hormuz, which typically carries about a fifth of the world’s oil and liquified natural gas (LNG). It has underlined the extent to which the world remains deeply reliant on fragile fossil fuel trade routes, while surging oil and gas prices have jolted energy markets and triggered widespread inflation fears.

Various car-selling platforms in the U.S. and Europe have reported a sharp increase in consumer interest for EVs since the war began in late February. The burgeoning trend comes even as a large chunk of the legacy car industry pivots back to internal combustion engine (ICE) vehicles.

Autotrader, an online vehicles marketplace, reported on March 26 a 28% jump in inquiries about buying a new EV and a 15% increase in inquiries about buying a used one, since the war in Iran started on Feb. 28. EV specialist Octopus Electric Vehicles said on March 25 it had seen EV leasing inquiries rise 36% since the start of the conflict.

But U.S. automakers Ford Motor, General Motors and Jeep owner Stellantis have all reversed course on EV strategies, booking tens of billions of dollars in combined write-offs and restructuring costs, in part due to lackluster consumer demand and shifting political landscapes.

Steffen Michulski, senior consultant at JATO Dynamics, said that while the situation is still evolving, it was already clear that the fallout from the Iran war could influence EV demand.

Owning a battery electric vehicle (BEV) has become more compelling for drivers covering a lot of mileage, Michulski said, given that a sharp rise in oil prices has made conventional gasoline cars much more expensive.

Switching to an EV may also provide households with an extra layer of energy independence, Michulski said, although he cautioned that it would be important not to “oversimplify” the situation. He pointed out that the overall economic environment may soften if inflation and supply chain costs continue to rise, for example, with these broader pressures impacting all powertrains — electric or combustion.

“To shorten and summarize it: Yes, elevated oil prices and the renewed focus on energy security are likely to provide a mid term boost to BEV demand,” Michulski told CNBC by email.

“But this is best understood as an incremental shift rather than a sudden market wide acceleration. Electricity price risks, technological progress on the combustion side, and general economic uncertainty all act as counterweights,” he added.

An analysis published by Transport & Environment earlier this month found that electric cars were already cutting the European Union’s oil imports, noting that the nearly 8 million EVs in the EU will save the bloc around 46 million barrels of oil in 2025. That’s the equivalent of almost 3 billion euros ($3.45 billion) in avoided oil import costs.

In the context of the Middle East conflict, meanwhile, the analysis said that petrol drivers were expected to be five times more exposed to higher oil prices than EV owners.

Poliscanova said EV growth drivers in Asia, notably Vietnam, Thailand and Indonesia, which all benefit from affordable models by Chinese car manufacturers, were all likely to see an accelerated shift away from fossil fuels.

“We’re likely to see an even faster shift in some of these economies away from oil, meaning that we in Europe today, still discussing things like biofuels and hybrids, just look really stupid and detached from the reality,” Poliscanova said.

A spokesperson for the European Commission, the EU’s executive arm, declined to comment.

Tesla is expanding ties with South Korea’s LG Energy Solution, striking a deal to buy $4.3 billion worth of battery cells for energy storage systems that will be made in Lansing, Michigan.

The plant was formerly developed for a joint venture between LG and General Motors before the automaker decided to retreat from that initiative in late-2024, selling its stake to LG as part of a pullback in the automaker’s electric vehicle investments.

While Tesla still makes most of its revenue from EVs, the company is investing in its more rapidly growing energy business, as data centers drive up electricity demand. Tesla’s Megapacks can store power produced using intermittent sources like solar or wind, or during off-peak hours, then make it available for use when demand is high.

Tesla currently sells Powerwall backup batteries for residential use with its solar installations, and much larger Megapack and Megablock systems for utility-scale power storage. Last year, revenue in the company’s energy segment increased 27% to $12.8 billion, accounting for 13% of total revenue. Total revenue dropped due to a 10% decline in the auto business.

Details of the Tesla-LG partnership were announced during an Indo-Pacific Energy Security Summit in Japan, according to a release from the U.S. Department of the Interior. The Trump administration announced a total of $56 billion in private sector commitments at the event.

A spokesman with LG Energy Solution said the company “will establish dedicated production lines at our Lansing facility to deliver on this agreement.” LG last year retooled the facility to build LFP (lithium iron phosphate) prismatic cells, later confirming a $4.3 billion deal with an unnamed company.

GM continues to have a significant presence in and around the Lansing battery plant, but the company has largely retrenched from the EV market, announcing $7.6 billion in related write-downs.

Tesla, meanwhile, expects its energy business to “have very high growth for as far into the future as we can imagine,” CEO Elon Musk said during the company’s fourth-quarter earnings call in January. Chief Financial Officer Vaibhav Taneja cautioned that the energy segment expects “margin compression” from low-cost competition and the cost of tariffs.

Tesla’s competition includes companies like BYD in China and climate-tech startups like Form, which is making iron-air batteries, and others.

WATCH: Why the EV factory boom in the U.S. south is suddenly in trouble

Hello, this is Leonie Kidd writing to you from London. Welcome to another edition of CNBC’s Daily Open.

U.S. President Donald Trump continues to dominate the news cycle, and his latest round with reporters in the Oval Office has yielded more headlines and market moves this morning. It’s only Tuesday and already it’s been a volatile week for oil, which remains the epicenter of trading action.

Market participants — as well as us journalists — will need to stay on their toes to keep up with developments.

Oil prices jumped over 2% on Tuesday as uncertainty lingered over a U.S.-led coalition to protect shipping through the Strait of Hormuz. President Donald Trump suggested Monday that the coalition was not fully in place as he urged other countries to get involved.

Energy analysts and traders said Monday that they wouldn’t be surprised if oil prices climb to as high as $200 per barrel as the sprawling Middle East crisis drags on.

U.S. electric vehicle maker Tesla‘s sales in Europe were down for a 13th consecutive month in January, while its biggest Chinese rival saw another surge.

Data published Tuesday by industry lobby group ACEA, or the European Automobile Manufacturers Association, found that Tesla’s new car registrations fell to 8,075 in January, down 17% from a year ago, representing the 13th consecutive month in which sales have shrunk.

Tesla’s market share across the European Union, Britain, Switzerland, Norway and Iceland fell to 0.8%, meanwhile, down from 1% in the same month last year.

It marks another “very weak” start of the new year for Elon Musk’s company, Rico Luman, senior sector economist for transport and logistics at Dutch bank ING, told CNBC by email.

“Tesla’s image has deteriorated in Europe last year and people have much more choice now with the range of new affordable EVs (including those of BYD and others like MG and ZEEKR) entering the market, while Tesla lacks new models,” he added.

Tesla’s focus on autonomous driving, rather than introducing new vehicles and expanding its range of mass models, is likely a factor too, Luman said.

“Another thing in Europe is that large numbers of first generations of Tesla’s are remarketed at the moment (after being leased for 4-6 years), this has driven second hand prices down,” Luman said, adding that there’s an abundance of competitively priced Tesla’s available on the used market.

Tesla has been beset by challenges in Europe, including robust competition, particularly from Chinese car brands. It’s also struggled to shake off reputational damage from Musk’s rhetoric and close relationship with the Trump administration after the U.S. president returned to office last January.

Musk spent nearly $300 million to help elect U.S. President Donald Trump to a second term and subsequently led a tumultuous initiative to slash federal agencies. Protests erupted at Tesla dealerships across Europe at the height of Musk’s involvement with the White House.

Musk’s relationship with Trump later cooled, following a bitter online feud with the U.S. president.

Shares of Tesla were 0.5% lower in premarket trading on Tuesday. The company is off by around 11% year-to-date.