Rising Gas Prices from Iran War Fuel Interest in Electric Vehicles

BY COMFORT OGBONNA

The recent surge in gasoline prices linked to the Iran London, the war-driven price spike has been a boon. One week after the February 28 U.S.-Israeli bombing campaign in Iran began, Miller recorded his busiest Saturday ever. Concern over rising petrol costs is driving customers to consider switching to electric models, and his team is aggressively purchasing EVs at auctions to keep up with demand. “We’re turning cars very, very quickly,” he said.

Government data underscores the impact on fuel prices. In Britain, gasoline costs rose 7% from the start of the war to March 16, while EU-wide prices climbed 8%, according to the European Commission. In the United States, the average gallon of gasoline jumped 27% since late February, reaching $3.72, according to the U.S. Energy Information Administration.

Historically, oil price shocks can influence car-buying habits. The 1970s energy crisis, for example, prompted U.S. consumers to favor smaller, more fuel-efficient vehicles, benefiting Japanese automakers at the expense of domestic manufacturers. Analysts caution, however, that current price increases are unlikely to cause an immediate shift in U.S. buying patterns. Sustained high prices or crossing psychological thresholds—such as $4 per gallon—often drive more significant behavior changes.

“Consumers are highly reactive to gas prices, but it tends to be that it has to hit a certain round number,” said Kevin Roberts, director of economic and market intelligence at CarGurus. Zach Xavier, a U.S. customer in Richmond, Virginia, is already acting on that concern, trading in a gasoline SUV for two electric vehicles in anticipation of rising fuel costs.

So far, the data show only modest shifts in the U.S. market. CarGurus reports no major surge in EV searches, while Edmunds noted a slight increase in shoppers exploring electrified vehicles—from 20.7% to 22.4%—in the first week after the war began. Experts suggest the broader U.S. transition to EVs may require much higher fuel prices, with Cox Automotive research indicating that gasoline hitting $6 per gallon would make a significant difference.

Europe, however, appears more poised for an accelerated EV shift. Fully electric vehicles accounted for 19.5% of European car sales last year, and governments are reintroducing tax incentives for EV purchases. In Germany, online dealer MeinAuto reported a 40% increase in EV-related website traffic since the start of the Iran conflict. A Carwow survey of 1,164 Germans conducted on March 12 found that 48% said rising fuel costs would influence them to consider an EV or hybrid, with EV interest rising from 55% at the end of February to 66% in early March.

In Vietnam, EV manufacturer VinFast is promoting electric vehicles with discounts of 3% on cars and 5% on scooters to attract drivers seeking alternatives to gasoline vehicles amid volatile fuel prices. Gasoline there had surged 50% as of March 9, according to the Vietnam Petroleum Group.

Industry experts caution that in the U.S., a substantial pivot to EVs remains unlikely unless fuel prices climb significantly higher. EV sales last year accounted for just 7.7% of new-car sales, a figure dampened by the Trump administration’s removal of the $7,500 federal tax credit for electric vehicle buyers. Rising gasoline costs could also depress overall vehicle sales, as consumers weigh the broader economic climate, including inflation and tariffs.

Stephanie Valdez-Streaty, director of insights at Cox Automotive, noted, “Unless you really need a car right now, you might hold off,” highlighting the uncertainty facing American car buyers in the midst of soaring fuel costs and geopolitical instability.

As the Iran war continues to disrupt oil shipments through the Strait of Hormuz, consumer behavior in both Europe and Asia suggests that the conflict may accelerate the shift toward electric mobility, even as the U.S. market remains more cautious.