Electric and plug-in hybrid cars gain ground in Iceland

Nearly 18% of passenger cars operated by Icelandic households in August 2025 were electric or plug-in hybrids, according to figures from Statistics Iceland reported by mbl.is. The figures mark a sharp change over just more than a decade.

There were 46,927 electric or plug-in hybrid cars in household use last August. Diesel and methane cars numbered 88,358, accounting for 33.1% of the fleet, while petrol cars numbered 131,822, or 49.4%.

In August 2014, only 181 electric or plug-in hybrid cars were operated by households. At the time, there were 146,590 petrol cars and 50,934 diesel and methane cars, meaning fewer than one in every 1,000 household cars used electricity or plug-in technology.

Petrol cars decline

The number of petrol cars operated by households has also fallen significantly. There were 156,015 in August 2018, but that figure had dropped by 24,193 to 131,822 by August 2025.

Diesel and methane cars, which are almost exclusively diesel vehicles, increased steadily until August 2023, when they reached 91,652. Their number has since declined slightly, to 88,358 in August 2025.

If the trend continues, one in every four cars operated by Icelandic households will soon be electric or plug-in hybrid. Figures from the Icelandic Transport Authority show that far more electric cars than petrol or diesel cars have been newly registered so far this year.

A total of 4,634 electric passenger cars in the M1 category have been newly registered this year, compared with 646 petrol cars and 607 diesel cars. There have also been 2,450 hybrid and 2,194 plug-in hybrid registrations. These vehicles can run on petrol or diesel as well as electricity, although they are primarily petrol-powered.

The changing composition of the vehicle fleet helps explain the decline in the number of petrol stations in the capital region. The shift has become large enough to have a measurable effect on overall demand, reducing the need for imported fuel and allowing surplus electricity in the power system to be used more effectively, particularly when cars are charged at night.