Era of 2,000 Won Gasoline: Electric Vehicle Market Demand Accelerates as Payback Period Drops to One Year

SNE Research: "EV Demand to Be Pulled Forward by 0.5 Years This Year"

Domestic Battery Companies Expected to Benefit

EV Battery Installations Grow Only 4.4% Through February

Amid expectations that high oil prices will persist for the time being due to the aftermath of the war between the United States and Iran, there is a forecast that the electric vehicle market will enter a recovery phase. As a result, domestic battery companies are also expected to benefit.

Hyundai Motor Company Electric Vehicle Assembly Process

On April 7, SNE Research, an energy sector market research firm, stated, "Due to the recent rise in oil prices triggered by the U.S.-Iran war, global electric vehicle market demand, which had stagnated over the past three years, is expected to be brought forward by 0.5 years compared to our previous forecasts." The firm further predicted that in 2027, demand would be brought forward by one year, and in 2028, by more than two years.

On the 9th, as international oil prices surpassed $100, fuel prices at gas stations nationwide increased, and cars lined up at the Mannam Square gas station in Seocho-gu, Seoul, trying to refuel before prices went up further. March 9, 2026. Photo by JinHyung Kang

SNE Research also expects the global electric vehicle penetration rate to jump sharply, from the previously forecasted 27% to 29% for this year, and from 30% to 35% for 2027.

Regarding the new demand forecast, Oh Ikhwan, Vice President of SNE Research, explained, "Consumers have experienced oil prices, which used to be in the range of 1,600 to 1,700 won per liter, rising rapidly to 2,000 to 2,200 won per liter in a short period of time. Even if oil prices stabilize in the future, concerns about uncertainty are likely to result in the early adoption of electric vehicles."

SNE Research Revised Mid-to-Long-Term Market Forecast for Electric Vehicles

The instability of oil prices triggered by the war between the United States and Iran is leading to increased purchase inquiries for electric vehicles from end consumers. It has already been observed that both domestic and international car dealers are significantly increasing their orders for electric vehicle models compared to before.

According to U.S. automotive media outlet WardsAuto, sales of battery electric vehicles (BEVs) in the U.S. last month reached 88,582 units, a sharp increase of 21.5% from the previous month.

SNE Research analyzed that as fuel prices rise, the payback period between the Kia EV5 (an electric vehicle) and the Kia Sportage 1.6T (a gasoline model) is becoming shorter.When the fuel price is 1,600 won per liter, it takes two years to recover the price difference, but when the price is 2,000 won, it takes only about one year and two months.

Although the purchase price of the EV5 is several million won higher than that of the Sportage, the lower battery charging costs and taxes compared to gasoline can reduce the burden of the price gap. In addition, SNE Research found that as oil prices rise, the difference in total cost of ownership (TCO - all costs incurred from vehicle purchase to scrapping) between electric vehicles and internal combustion engine vehicles widens by several million won or more.

When the fuel price is 1,600 won per liter, the total cost of operating the Sportage for 10 years is 59 million won, but when the price is 2,000 won, it rises to 65 million won, according to SNE Research. In comparison, the 10-year total cost for the EV5 is 44 million won.

The electric vehicle market remained sluggish up until February this year. According to SNE Research, the total battery usage for electric vehicles (including hybrid and plug-in hybrid vehicles) registered worldwide from January to February was 134.9 GWh, growing only 4.4% compared to the same period last year.

During the same period, the combined global market share for electric vehicle battery usage held by Korea’s three major battery makers—LG Energy Solution, SK On, and Samsung SDI—fell by 2.2 percentage points compared to the previous year, recording a 15.0% share.

This content was produced with the assistance of AI translation services.