The oil shock of early 2026 has not created the EV business case but it has dramatically improved it. For many fleet managers who have been waiting for the numbers to stack up, the tipping point may now have been reached, writes Jonathan Murray, Acting Managing Director, Zemo Partnership
The oil price shock caused by the Iran war has surely thrown many fleet managers’ budget calculations out of the window. The cost of running a medium-high mileage diesel van, for example, could easily be £4,000 more this year than its electric equivalent, at current diesel prices.
Current prices may not persist, but at the time of writing the Brent crude price is hovering at around $100 a barrel, having peaked at close to $120 earlier this month.
According to the RAC, the retail prices of petrol and diesel in the UK have risen every day for more than 40 days in a row. While the conflict may be easing, but there seems little prospect that oil prices will return to the level (around $60/bbl) seen at the start of the year.
The closure of the Strait of Hormuz in early March, triggered by the conflict, prompted the largest inflation-adjusted quarterly increase in diesel prices since 1988 – a potent reminder that diesel (and petrol) costs can be volatile and are completely out of the control of UK authorities.
It’s no surprise, then, that interest in EVs is surging sharply. Octopus Electric Vehicles, for example, reported an 89% increase in leasing orders in March compared with February. Online marketplaces in the UK, Germany, France and Spain have seen rapid growth in inquiries about electric vehicles; Carwow reported an increase of approaching 30% in inquiries about EVs in the UK, Spain and Germany last month.
This level of interest is hardly surprising when you consider that for a 50-vehicle van fleet, the widening cost gap between diesel and electric could add £200,000 to a company’s energy bill this year. For a similar size car fleet, the maths are almost as compelling.
Energy costs are only part of the picture. With fewer moving parts, EVs typically incur little more than half the servicing, repair and maintenance costs of equivalent diesel vehicles, typically saving operators a further £400-£600 per vehicle per year.
The total cost of ownership (TCO) crossover point between EVs and fossil fuel cars and vans in most vehicle segments has now been reached in many segments. While the balance will continue to fluctuate with oil prices, it’s well worth noting that UK electricity supply is increasingly dominated by renewables and that its price is regulated and stable; the Ofgem price cap sets electricity at 24.67 pence per kWh for Q2 2026. Diesel, by contrast, can move 30 pence per litre in a month because of a conflict 3,000 miles away.
Electricity’s price predictability offers greater certainty – and therefore real financial value - even beyond the significant savings now being attained.
The oil shock of early 2026 has not created the EV business case but it has dramatically improved it. For many fleet managers who have been waiting for the numbers to stack up, the tipping point may now have been reached.
Zemo members are invited to working group meetings coming up on energy infrastructure (24 April), public mobility (7 May) and low carbon fuels (21 May).
For more information and to join the Partnership: www.zemo.org.uk
