War Drives Gas Prices Higher, Sparking New Interest in Electric Vehicles

Rising fuel costs due to international conflict are prompting more drivers to consider electric vehicles as a way to avoid volatile gas prices. While electricity rates remain more stable than gasoline, experts say the long-term benefits of EVs depend on various factors including upfront costs and government incentives.

Kevin Ketels purchased his electric 2026 Chevrolet Blazer with future technology in mind, not fuel savings. The Detroit resident wanted to embrace what he saw as the next generation of transportation. However, with current international conflicts pushing gasoline prices higher, the 55-year-old is relieved he’s no longer dependent on his previous gas-burning SUV from over a decade ago.

“Electricity can go up, but it won’t go up nearly as much as gas will and it won’t go up nearly as fast, either,” said Ketels, who teaches global supply chain management at Wayne State University.

Industry analysts believe sustained elevated fuel costs could boost electric vehicle interest and purchases, particularly among consumers who expect their power bills to remain relatively unaffected by international turmoil.

However, numerous variables impact both consumer EV decisions and utility rates.

Owners of traditional gasoline vehicles face greater exposure to price swings caused by international tensions compared to those who plug in their cars. AAA reports the nationwide average for regular gasoline reached $3.57 this week, climbing from $2.94 just one month earlier.

In contrast, “residential electricity prices are regulated and are much less volatile than gasoline prices,” explained Erich Muehlegger, an economics professor at University of California, Davis. “As a result, EV owners are largely unaffected by oil price shocks.”

Still, analysts note that power costs have been climbing across the country due to multiple factors, including increased electricity demand from expanding data centers.

“This is an inflationary event,” stated Holt Edwards, principal in Bracewell’s Policy Resolution Group, referring to the current conflict. “Is this the driver in electricity prices? I think probably not. But it’s certainly a contributing factor.”

The degree to which oil and gas disruptions might impact the electricity sector remains unclear.

For EV owners, the cost of charging largely depends on what energy sources comprise their local power grid, according to specialists.

Since regulators establish residential electricity rates on an annual basis, most households avoid month-to-month fluctuations in natural gas costs. While higher natural gas prices can affect electricity generation expenses, natural gas hasn’t experienced the same rapid price increases as oil recently.

Natural gas represents just one of numerous energy sources—along with coal, nuclear power, and renewable energy—that supply the electrical grid.

“The energy component varies depending on the energy you’re using and the price of the energy that you’re using to generate electricity,” explained Pierpaolo Cazzola, an energy specialist at Columbia University’s Center on Global Energy Policy. “What happens is that in the U.S., the variation of the price of the energy component is smaller than it is elsewhere.”

Researchers indicated that prolonged warfare could impact future electricity bills, providing additional justification for nations to embrace clean energy transitions.

“Clean power and electrification combined is what provides the most security,” noted Euan Graham, an analyst at energy think tank Ember.

Michael B. Klein, a 56-year-old software developer from Evanston, Illinois, has operated EVs for eight years to reduce fuel expenses and address environmental concerns.

Whenever electrical grid performance advances—particularly through renewable energy additions—”I get that benefit no matter what,” said Klein, who operates a Chevy Bolt. “They can improve the efficiency of gas engines, but you have to get a new car in order to reap the benefit of that.”

Multiple researchers identify elevated gasoline costs as a significant factor in EV sales, especially when high prices continue long-term. Motorists also explore more fuel-efficient hybrid options during such periods.

Automotive shopping platform Edmunds examined consumer research patterns for the week beginning March 2, following the start of the Iran conflict. Their data showed that interest in hybrids, plug-in hybrids, and battery EVs represented 22.4% of all vehicle research on their platform that week, increasing from 20.7% the previous week. When analysts reviewed the major nationwide fuel price spikes in 2022, they observed similar sharp increases in electrified vehicle consideration.

Whether this translates to actual EV purchases depends on buyers’ expectations for long-term savings, not just immediate benefits, researchers explain.

Adding complexity: A sudden surge in EV demand could increase vehicle prices, Graham observed.

“I think the real step change would be in whether this causes governments to shift tax, tariff policies around EVs,” Graham stated. Such changes would help decrease fossil fuel reliance, he added.

EV purchasers enjoy “really substantial” gasoline savings throughout their vehicles’ lifespans even without government tax incentives, according to Peter Zalzal, an attorney with Environmental Defense Fund.

“We’re talking about thousands and thousands of dollars” in savings, Zalzal noted. “And as gas prices increase, those savings are only greater. Fuel costs are a big piece of overall vehicle costs, and increases in fuel prices have significant impacts on people.”

Nevertheless, new EV purchase prices still exceed those of gasoline-powered vehicles; new EVs averaged $55,300 last month, while new vehicles overall averaged $49,353, according to Kelley Blue Book. Some specialists also raised national security concerns regarding EVs due to China’s dominance in significant portions of the EV supply chain.

Ketels, the EV owner and professor, believes EVs and renewable energy should become strategic priorities for both individuals and the United States because they could be manufactured domestically “and we don’t have those fluctuations and those worries.”

However, with the federal government reducing many incentives for both sectors, “it puts us at a disadvantage globally,” Ketels stated. “I think it’s been a terrible mistake to withdraw these incentives and to attack the sustainable energy industry,” and the current conflict “is just making it that much more obvious.”