As the U.S. continues to wage war in Iran alongside Israel, the subsequent rise in gas prices has caused interest in battery electric vehicles (BEVs) to rise. Unlike combustion engine vehicles, BEVs are entirely powered by electricity, making them relatively insulated from shocks to the global fuel market.
In the meantime, the United States’ total reliance on fossil fuels for transport is forcing drivers in the country to dig deeper into their pockets to pay for gas, highlighting another benefit of owning an electric car.
The ongoing Iran war has caused gas prices in the U.S. to spike by around 20%, a surge which has reportedly accelerated market interest in electric alternatives. At the moment, Iran is preventing oil tankers from passing through the Strait of Hormuz, effectively blocking an established path for around one fifth of global oil flows.
Bloomberg reports that this bottleneck in oil flows has caused gas prices in the U.S. to jump to $4.29 per gallon, which is the most expensive gas prices have been in the past three years. In a statement to Bloomberg, car dealer consultancy Dealer Services noted that when U.S. gas prices reach $4.00 per gallon, consumers are much more likely to consider an electric car.
Data provided by car-purchasing platform CarEdge supports that hypothesis: electric vehicle searches on the platform reportedly jumped by 20% through the week following America’s first attack on Iran.
Edmunds noted a similar interest in electric vehicle interest once the war began, and analysts note that if gas prices don’t fall in the near future, many drivers may begin seriously considering an electric car as their next vehicle. After all, ‘fueling’ an EV is significantly cheaper than refueling a conventional vehicle, costing around 50% less per mile.
Even though the average electric car is still more expensive than a comparable gas-powered model, a large portion of these costs are cancelled out by reduced energy and maintenance costs over time. Drivers with access to employer-provided EV charging facilities can spend even less to recharge their vehicles, particularly if they drive just a few dozen miles per day.
With conflicts heating up in notable oil-producing regions, an electric car that’s cheap to refuel and is relatively immune to geopolitical shocks could help reduce the financial strain on American drivers and give them some peace of mind during energy crises.
This isn’t the first time conflict in the Middle East and other oil-producing countries has caused interest in electric vehicles to surge. When Russia began its Ukraine invasion in early 2022, Bloomberg notes, gas prices in the United States jumped to over $5.5 a gallon while overall EV sales for the year 2022 coincidentally rose by over 50%.
Despite President Donald Trump’s war against renewable energy and green infrastructure, many of his moves seem to stress the importance of leaving fossil fuels to history and adopting clean energy. Hopefully, the U.S. will reverse its policies on green energy and embrace renewables before China cements itself as the most dominant player in renewable energy.
If the current conflict in the Middle East persists for a lot longer, companies like Massimo Group (NASDAQ: MAMO) could see their sales figures jump as more motorists opt for EVs to escape the high gas prices.
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