Though EVs typically cost more on average than an equivalent gas-powered vehicle, pump prices pushing close to $4 per gallon on average — and much higher in states like California and New York — are changing the consideration matrix.
According to Edmunds.com, shopper consideration of electrified vehicles — including hybrids, plug-in hybrids, and battery electric vehicles — climbed to 23.8% of all vehicle research activity on the platform, up from 22.4% the prior week and the highest weekly level recorded so far in 2026.
“High gas prices combined with elevated interest rates are a tough one-two punch for car shoppers,” Edmunds head of insights Jessica Caldwell said in the report, adding that early signals on the site’s activity show a slight uptick in shoppers exploring alternatives to traditional gasoline-powered vehicles.
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Cox Automotive reported that used EV sales in the US totaled 30,879 units in February, up 28.8% year over year and 4.2% month over month — a sign that consumer appetite for electrified vehicles was building.
The economic case for switching is becoming harder to ignore. Morgan Stanley analyst Andrew Percoco laid out the numbers in a report published this week: At $4 per gallon, average annual fuel costs for a gas-powered vehicle run approximately $1,700, compared to just $700 for an EV.
“Every $1/gallon increase in cost of gas results in a $450/yr increase in fuel cost for ICE [internal combustion engine] vehicles, assuming 27 mpg and 12,000 miles driven/yr. At $4/gallon gas prices, we estimate that charging costs for EVs are 60% cheaper than annual fuel costs for an ICE vehicle,” Percoco wrote.
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Percoco added that “elevated fuel prices for a sustained period of time (6+ months) may weaken demand for high-margin SUVs/trucks and increase demand for EVs” — a dynamic he sees as a positive for Tesla (TSLA), Rivian (RIVN), and Lucid (LCID) in particular.
Rivian CEO RJ Scaringe told Yahoo Finance that he believes prolonged high gas prices will eventually change consumer behavior. “I think if fuel prices stay high, it’ll start to influence behavior,” he said. “After people have gone through a few cycles of seeing gas at $4 or $5 a gallon, I think it definitely will start to have an impact.”
Rivian is hoping the trend of higher gas prices for longer will help boost sales of its upcoming midsize R2 EV.
Though EV sales are surging in regions like greater Europe and China, Americans are a fickle bunch, usually willing to pay more for gas to power their preferred modes of transport — large trucks and SUVs.