It's been a bumpy road for the electric vehicle market, as declining federal support and stagnating public interest have eroded sales.
But electric vehicle sellers could soon get a boost from an unexpected source: The war in Iran is driving up gas prices.
As Americans look to save money at the pump, many more will consider switching to an electric or hybrid vehicle. Average gasoline prices in the United States have increased nearly 17% since February 28 to reach $3.48 per gallon. In California, the average is $5.20 per gallon.
Electric vehicles are more expensive than gasoline vehicles and charging them is not cheap at current electricity prices, but sky-high gasoline prices may tip the balance for consumers to decide what type of vehicle they will buy next.
“We will probably see an uptick in the adoption of electric vehicles and, in particular, hybrids” if gasoline prices remain high, said Sam Abuelsamid, an automotive analyst at Telemetry Agency. “The last time oil prices surpassed $100 per barrel was in early 2022 and that's when we saw electric vehicle sales really start to pick up in the US.”
In a 2022 AAA survey, 77% of respondents said saving money on gas was their main motivation for purchasing an electric vehicle. That year, 25% of respondents said they were likely or very likely to purchase an electric vehicle.
As oil prices cooled, the figure fell to 16% in 2025.
In California, annual sales of new light-duty, zero-emission vehicles increased 43% in 2022, according to the state Energy Commission. The market share of zero-emission vehicles among all light vehicles sold increased from 12% in 2021 to 19% in 2022.
“Before 2022, we didn't really have electric vehicles available when we suffered the oil price shocks,” Abuelsamid said. “But every time we did it, it coincided with a move toward more fuel-efficient vehicles.”
Traders anticipate a windfall.
Brian Maas, president of the California New Car Dealers Association, predicted that enthusiasm for electric vehicles will rebound across California if oil prices don't come down.
“If previous gas price spikes are any indication, you tend to see interest in more fuel-efficient vehicles,” he said.
Rising gas prices could be a lifeline for electric vehicle makers at a time when federal support for green cars has been waning.
Under Trump, a $7,500 federal tax incentive for new electric vehicles was eliminated in September, along with a $4,000 incentive for used electric vehicles.
In California, the share of zero-emission vehicles in the total new vehicle market was 22% during the first 10 months of 2025, then fell sharply to 12% in the last two months of the year, according to California Auto Outlook.
Meanwhile, Tesla, the country's most popular electric vehicle brand, has grappled with an implosion of its reputation among some consumers after its CEO, Elon Musk, became one of Trump's most vocal supporters and helped run the controversial Department of Government Efficiency.
In recent months, Ford, General Motors and Stellantis have scaled back their electric vehicle ambitions.
Other automakers, including Nissan, announced plans to stop producing their most affordable electric models.
The Trump administration has moved to roll back federal fuel economy standards and revoked California's permission to implement a ban on the sale of new gasoline cars by 2035.
David Reichmuth, a researcher with the Union of Concerned Scientists' Clean Transportation program, said the change in production plans will affect the availability of electric vehicles, even as demand increases.
That could prevent people from switching to cleaner vehicles, regardless of higher gas prices.
“This is a transition that we must make both for public health and to try to slow the damage caused by global warming, whether or not the price of gasoline is three dollars, five dollars or six dollars a gallon,” he said.
According to Cox Automotive, sales of new electric vehicles nationwide decreased 41% in November from a year ago. Used EV sales were down 14% year over year that month.
To be sure, oil prices can fluctuate wildly in times of uncertainty. Consumers will take time to decide on new purchases.
Brian Kim, who manages used car sales at Ford of downtown Los Angeles, said he has yet to see an increase in the number of people interested in electric vehicles, hybrids or more fuel-efficient gasoline engines.
Still, if the price at the pump remains stuck above its current level, this could happen soon.
“Once gas prices reach six [dollars per gallon] or more and people feel it in their pockets, maybe things will start to change,” he said.
