The trend: The rapid rise in gas prices since the start of the war in Iran is reigniting interest in electric vehicles.

• The national average gas price stood at $2.98 a gallon on February 28, before the conflict began, and climbed to $3.63 by March 13.
• Experts warn prices could surpass $5 per gallon if oil reaches $200 a barrel.

That spike is already influencing shopper behavior. In the week starting March 2, 22.4% of car shoppers on Edmunds were researching electrified vehicles—a category that includes hybrids, plug-in hybrids, and battery electric vehicles (BEVs)—up from 20.7% the prior week. Most of the increase was driven by growing interest in BEVs.

The pattern mirrors what happened after Russia’s invasion of Ukraine in February 2022, when electrified vehicle consideration on Edmunds jumped to 25.1% of all vehicle research activity in March from 17.5% the prior month.

The challenge: Elevated gas prices may spark interest, but structural headwinds remain.

The expiration of the federal EV tax credit last year has caused the market to lose momentum, with slowing growth in projected US EV car drivers. EV registrations fell 41% YoY in January to 59,802 vehicles, pushing EV market share down to 5.1% from 8.3% a year earlier, according to S&P Global Mobility. That decline is even steeper than Edmunds’ December forecast, which projected EV share would slip to 6% this year from 7.5% last year.

The slowdown has prompted several automakers to take multibillion-dollar charges tied to delayed or canceled EV investments—including Honda, Ford, General Motors, and Stellantis.

Affordability remains a central hurdle. With consumers feeling squeezed, interest rates elevated, and EV prices still high, many buyers will likely remain on the sidelines. However, some automakers are pivoting toward lower-priced options. Nissan is redesigning the Leaf, Chevrolet is bringing back the Bolt, and EV startups Rivian and Lucid are developing models priced under $50,000.

However, the used market could become an unexpected catalyst. Off-lease EV volume is projected to jump 185% this year—from 106,000 vehicles to 300,000—according to Cox Automotive, which could dramatically expand access to more affordable options.

Implications for automakers and marketers: It’s no surprise that rising gas prices are pushing more shoppers to consider EVs. But converting that interest into sales is a heavy lift as consumers grapple with higher everyday expenses.

The challenging landscape is causing many consumers to put big-ticket purchases under intense scrutiny. New cars are incredibly expensive: The average transaction price for a new vehicle reached $49,353 in February, while EVs averaged $55,300, according to Kelley Blue Book. Higher financing costs make these purchases less affordable. Even if drivers are attracted to the idea of saving at the pump, the upfront cost has to work.

That puts pressure on automakers to sharpen their value proposition—emphasizing the total cost of ownership while backing it up with meaningful incentives and competitive financing. Long-term fuel savings are compelling, but they won’t outweigh short-term budget constraints.

The real wildcard may be the used market. If off-lease EV volume jumps as projected, lower-priced vehicles could open the door to mainstream buyers. In this environment, value will determine how much of this gas-driven momentum translates into sustained adoption.