Are high gas prices good news for EVs? It’s complicated. | MIT Technology Review

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Skip to ContentMIT Technology ReviewFeaturedTopicsNewslettersEventsAudioMIT Technology ReviewFeaturedTopicsNewslettersEventsAudioClimate change and energyAre high gas prices good news for EVs? It’s complicated.Fossil fuel volatility can have ripple effects for all of us.
By Casey Crownhartarchive pageMarch 26, 2026Getty Images I live in a dense city with plentiful public transportation options and limited parking, so I don’t own a car. I’m often utterly clueless about the current price of gasoline. But as the conflict in Iran has escalated, fossil-fuel prices have been on a roller-coaster, and I’ve started paying attention. In the US, average gas prices are $3.98 a gallon as of March 25, up from under $3 before the war started. Online there’s been what almost looks like cheerleading about this volatility from some folks, including EV owners—some of the social media posts and op-eds have read as nearly gleeful. The subtext (or even the text) is “I told you so.”  Don’t get me wrong—this could be an opportunity for EVs to make headway around the world. But there are plenty of reasons that even the carless among us should be concerned about a sustained rise in fossil-fuel prices.
Historically, this is exactly the sort of moment that’s pushed people to reevaluate how they get around. During the oil crisis of the 1970s, Americans switched to smaller, more efficient cars in droves. It was a major opportunity for Japanese automakers, whose vehicles tended to fit this mold better than those produced by their US counterparts. We’re already seeing early signs that people are interested in going electric. One US-based online car marketplace said that search traffic for EVs was up 20% following the initial attack on Iran. For more popular models like the Tesla Model Y, traffic nearly doubled.
And the interest is global. One car dealership outside London said it’s struggling to keep up with demand and is sending staff to buy more EVs at auction, according to Reuters. Another in Manila told Bloomberg that it got a month’s worth of orders in two weeks. The timing here is really interesting in the US in particular, because we’re about to see a wave of more affordable used EVs hit the market. Three years ago, a leasing boom started with the Inflation Reduction Act, which included incentives for EVs, including leases. About 300,000 such leases are set to expire this year, and many of those vehicles could come up for sale, increasing the available supply of affordable used EVs. Related StoryChina figured out how to sell EVs. Now it has to deal with their aging batteries.Read next The interest is there, but what would it really take for more drivers to make the switch? Nice, round numbers do tend to get people’s attention. Some point to $4 per gallon (which the national average is quite close to right now). At that price, the total cost of ownership for an EV is comfortably lower than the cost for a gas-powered car, even with higher electricity prices, according to data from the energy consultancy BloombergNEF. Then again, maybe that won’t quite do the trick: One survey from Cox Automotive found that most US consumers would consider switching to an EV or hybrid if gas prices hit $6 per gallon. But this is also the second big incident of fossil-fuel volatility in the last five years, which could make consumers more ready to make the switch, as Elaine Buckberg, a senior fellow at Harvard, told Bloomberg. (The first was in the summer of 2022 when Russia invaded Ukraine.) I’m a climate and energy reporter, and I care about addressing climate change. So I’m always happy to hear about people shifting to EVs or any other option that helps cut down on greenhouse-gas emissions. But one aspect that I think is getting lost here is that sustained high fossil-fuel prices will be bad for even those of us who are untethered from the burdens of vehicle ownership. Fuel cost makes up between 50% and 60% of the cost of shipping goods overseas. Fertilizer production today requires natural gas, which has gotten significantly more expensive since the war began, particularly in Europe.

Jet fuel prices have basically doubled in the last month, according to the International Air Transport Association. Since those prices account for something like a quarter of an airline’s operating cost, that could soon make air travel—and anything that’s shipped by plane—more expensive. And if all this adds up to an economic downturn, it’s bad for big projects that need financing (even wind and solar farms) and for people who want to borrow money to buy a home or a car (including an EV). If you’re in the market for a car, maybe this uncertainty is what you needed to consider electric. But until we’re able to truly decarbonize not only our transportation but the rest of our economy, even this carless reporter is going to be worried about high gas prices. This article is from The Spark, MIT Technology Review’s weekly climate newsletter. To receive it in your inbox every Wednesday, sign up here.  by Casey CrownhartShareShare story on linkedinShare story on facebookShare story on emailPopularA “QuitGPT” campaign is urging people to cancel their ChatGPT subscriptionsMichelle KimMoltbook was peak AI theaterWill Douglas HeavenHow Pokémon Go is giving delivery robots an inch-perfect view of the worldWill Douglas HeavenOpenAI is throwing everything into building a fully automated researcherWill Douglas HeavenDeep DiveClimate change and energyWhat’s next for EV batteries in 2026Expect to see new chemistries hitting the roads, a shifting policy landscape, and a renewed focus on cost and performance.
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The recent volatility in global fossil fuel prices, spurred by events like the conflict in Iran and the ongoing effects of the Ukraine war, presents a complex and arguably beneficial situation for the electric vehicle (EV) market. While some EV enthusiasts have viewed this increase in gasoline prices with celebratory optimism, a more nuanced assessment reveals several critical factors. Historically, periods of high oil prices, such as the 1970s energy crisis, have driven significant shifts in consumer behavior, notably encouraging the adoption of more fuel-efficient vehicles. This trend is already manifesting in the present, with increased searches for EVs—as evidenced by a 20% surge in traffic to the Tesla Model Y—and heightened demand for EVs across international markets, leading dealerships to actively seek out additional inventory.

Further bolstering the potential for EV adoption is the impending expiration of approximately 300,000 EV leases under the Inflation Reduction Act, creating a growing supply of affordable used EVs on the market. Data from BloombergNEF suggests that at current gas prices, around $4 a gallon, the total cost of ownership for an EV is comfortably lower than that of a gasoline-powered car. However, this projection remains contingent on electricity prices and consumer willingness to embrace higher costs. A Cox Automotive survey indicated that approximately 60% of US consumers would consider switching to an EV or hybrid if gas prices reached $6 per gallon, highlighting a significant psychological threshold.

The current situation, characterized by two notable fossil-fuel price spikes in the last five years—including the 2022 invasion of Ukraine—could also significantly impact consumer sentiment and accelerate the transition to EVs. Senior Fellow at Harvard, Elaine Buckberg, noted this as a key factor in driving potential consumers towards alternative vehicles. Nevertheless, the impact extends beyond individual consumers. The rise in fuel costs directly affects significant sectors, including international shipping (where fuel contributes between 50% and 60% of transportation costs) and fertilizer production, significantly impacting global food prices. Jet fuel prices have also doubled in the last month, posing a challenge to the airline industry and, consequently, global trade.

Despite the potential for increased EV adoption, Casey Crownhart, a climate and energy reporter, cautions against viewing this solely as a positive development, emphasizing that sustained high fossil-fuel prices will negatively impact even those without traditional transportation burdens. The journalist highlights the interconnectedness of the global economy and the potential for economic downturns stemming from increased energy costs, which could hinder major projects, including renewable energy initiatives, and reduce consumer spending on items like homes and cars. Ultimately, Casey Crownhart maintains that until a truly decarbonized economy is achieved, she remains concerned about the long-term effects of volatile fossil-fuel prices, even as they create opportunities for electric vehicle adoption.