Rising gas prices have sparked fresh interest in EVs

The surge in gas prices since the start of the Iran war is causing more Americans to rethink what they drive.


Early data from the car shopping site Edmunds shows a growing share of consumers researching electric vehicles, hybrids and other fuel-efficient options in recent weeks. It's the latest sign that rising costs at the pump are beginning to shift attention to more energy-efficient alternatives.

Morgan Stanley estimates that with gas at around $4 per gallon on average, it’s 60% cheaper to power an electric vehicle than a traditional gas-powered car. But the firm also predicts it would take about six months for elevated gas prices to actually trigger increased demand for hybrids and EVs.


For people already in the market for a car, though, the shift could come much sooner.


“They’re going to be more cost-conscious about their fuel costs, and so that will drive people shopping now towards more fuel-efficient vehicles and EVs," said Elaine Buckberg, a senior fellow at Harvard’s Salata Institute for Climate and Sustainability and a former chief economist at General Motors.

Previous energy shocks, from the 1970s oil crisis to the 2022 surge following Russia’s invasion of Ukraine, have served to tilt consumer preferences toward more energy-efficient vehicles — but only after long periods of higher gas prices.

Still, Buckberg said, the series of back-to-back shocks over the past five years could make this moment different, leaving drivers more sensitive to swings at the pump — and more frustrated by the volatility.