Good news for the EV market?

TL;DR: Sorry for the whiplash, but EVs are again having a ~moment~, and this time it’s not because of a tax credit or Cybertruck. The US-Israel war with Iran has created a choke point for the 20% of global oil supplies that travel through the Strait of Hormuz, sending gasoline prices surging. Now, consumers are taking another look at EVs—though experts say it’s currently more of a vibe shift than a buying spree. Either way, it could be yet another blow to the US auto industry that just spent months ctrl-alt-deleting its EV investment.

What happened: Vehicle shopping website Edmunds reported that consideration of electrified models made up 23.8% of vehicle research activity during the second week of March—the highest level so far this year, and up from 22.4% the previous week and 20.7% the week before. “When we see a gas price spike, people start to evaluate options,” Jessica Caldwell, Edmunds’ head of insights, tells Tech Brew. “A lot of people just want to know what is out there.”

Reminder: Domestic automakers spent the last several months pulling back on EVs after federal policy changes deprioritized electrification—including killing a $7,500 tax credit for EV purchases.

Though there are early signs that consumers are taking another look at EVs to insulate themselves from gas price spikes, this hasn’t yet translated to an uptick in sales. But experts like Caldwell say it’s an opportunity for automakers, especially pure-play EV companies like Rivian and Lucid, to promote electrified models and get in front of newly motivated shoppers before the moment passes.

World view: While American consumers are still weighing their options (according to former Chief Economist of GM Elaine Buckberg, it takes three to six months of high gas prices to get buyers to look at alternatives), the rest of the world is at the dealership. No. 1 global EV maker BYD, for example, is seeing stronger demand across Asia and is ready to capitalize, offering free charging promotions and debuting ultrafast charging tech. Vietnamese EV maker VinFast’s dealers have also reported a rise in sales.

A used EV dealer in England told Reuters he’d just had his busiest-ever Saturday. And nearly half of German consumers said in a survey that higher fuel prices “would influence their decision to consider an EV or hybrid.”

The bottom line: Experts say US consumers who want to avoid gas station politics should look to the used EV market, where a flood of off-lease vehicles is about to hit, giving buyers a huge advantage.

Though, for the auto industry, the bigger picture is harder to ignore. Some experts warn that the US stands to fall further behind on electrification if it lets this crisis go to waste. Consider the ’70s and ’80s as an example, when, during that fuel crisis, Japanese automakers gained a lasting foothold in the US by selling affordable, fuel-efficient models. That’s how you end up with a Camry in every driveway. —JG