Automakers retreated from EVs. Then gas prices hit $4 a gallon

The average price of a gallon of gas in the U.S. has topped $4 a gallon for the first time since 2022. It’s jumped more than a dollar since the war in the Middle East began in late February, according to AAA, up from under $3 a gallon in late February.

It would stand to reason then that more car shoppers might turn to electric vehicles to avoid those costly trips to the pump. There’s some evidence, from car-buying site Edmunds, that consumer interest in EVs has ticked up in the last few weeks. They’re seeing more people researching electric models on their site.

But it’s a bit too soon to say whether that interest is translating into more sales. And whether or not sales climb, the EV market entered this period of higher gas prices in a tough spot.

Last year, the Trump administration and GOP-led Congress stripped away most of the federal policies that had been supporting the expansion of electric vehicles. One of the signature supports was federal tax credits, expanded under the Biden administration, which up until last September, knocked thousands of dollars off the price of many new and used EVs.

In the months before those credits went away, electric car sales spiked. But after that high, came the low.

“I like to refer to the time after that as like a hangover,” said Alex Lawrence, head of EV Auto, which sells used EVs at dealerships in Utah and Tennessee.

For his business, the bad part of that hangover lasted about a month. Then, he said, sales slowly crept back up.

The EV market as a whole, however, is still kind of hungover. Sales slumped from 10% of the car market in the third quarter of 2025 to under 6% in the fourth quarter, according to Kelley Blue Book.

Many car manufacturers reacted by scaling back.

“We heard automakers saying that they were going to delay plans or cancel EV programs altogether,” said Jessica Caldwell, head of insights at Edmunds. “So it sort of felt like a bleak market. It wasn't necessarily stopping, but it didn't feel great in the short term.”

In addition to ending federal EV tax credits, the Trump administration also weakened fuel economy rules. Many carmakers turned their focus, and money, back toward gas-fueled SUVs and trucks.

“And then all of a sudden, gas prices spike,” Caldwell said. “It's like, ‘Well, are you sure you want to do that?’”

Because those high prices at the pump could lead more Americans to go electric, depending on how high prices go and how long they stay high, said Tim Levin, senior editor of the EV news publication InsideEVs.

Even if gas prices remain elevated, EVs face other “points of friction,” Levin said, that have always made them a tougher sell.

“People are worried about charging infrastructure. Not everybody has a home charger, which is where you're going to get the best savings and the best convenience,” he said. “People are worried about range. The cost of these EVs is pretty high.”

But that last point, at least, appears to be changing a bit. Several car companies are rolling out models this year that are cheaper than previous generations of EVs. The Chevy Bolt, the Nissan Leaf, as well as new electric models from Toyota and Subaru all have sticker prices under $40,000 (the Bolt and Leaf are each under $30,000). That’s much lower than the average EV sale price of over $57,000 last year, per Kelley Blue Book.

Meanwhile, the market for used EVs is growing fast, driven by many electric models coming off three-year leases, Levin said.

“Just by virtue of the fact that a lot more EVs were sold in the last few years than they were before, you have a lot of really high quality, really well-priced, used EVs coming onto the market right now,” he said.

Dealership owner Alex Lawrence expects buyers will scoop these up, and said he’s seen an uptick in sales the last few weeks as gas prices have risen. He’s decided to bulk up his inventory of used electric vehicles by about a third, and he plans to open two new dealerships this year.

“I'm all in, I mean, I'm accelerator to the floor,” Lawrence said. “We're not slowing down at all.”

Lawrence is betting gas prices will stay high for a while, he said, and more people just won’t want to deal with them anymore.