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Gas prices are rising again – and it affects not only drivers at the pump, but potential car buyers as well.
Global instability linked to the Iran war is driving up fuel costs, with the national average gas price now more than $4 a gallon. Historically, when prices rise at the pump, consumer demand increasingly shifts toward fuel-efficient vehicles. This surge could put upward pressure on hybrid and EV prices, which could impact buyers who wait too long to buy.
Here’s a closer look at what’s happening and why buyers considering a hybrid or EV may want to act sooner rather than later.
How rising US gas prices could drive up hybrid and EV costs
High gas prices reshape car buying behavior almost immediately. As fuel costs rise, drivers look for ways to reduce their long-term expenses, often purchasing vehicles that require less gas or none at all.
“The continued rise in gas prices drives consumers toward more fuel-efficient vehicles, and we’re already seeing a modest increase in interest for new and used EVs on CarGurus as prices climb at the pump,” said Kevin Roberts, director of economic and market intelligence at the car-shopping site. CarGurus.
Previous gas price increases provide insight into demand
Historically, consumer interest in clean powertrains declines with gas prices.
“Gas price increases in 2008 and 2022 led to what I would call a ‘Chinese rush’ response – demand for fuel-efficient vehicles increased rapidly, then decreased just as rapidly when gas prices fell,” Roberts said.
In 2022, when gas prices exceed $5 per gallon nationwide, the impact on EV pricing was swift.
“When prices reached $4, EV interest on the CarGurus platform surged and used EV prices increased rapidly – a clear indication of demand exceeding supply,” Roberts said. “Between February and June 2022, the average price of a used EV rose from about $54,000 to $68,000, but ultimately declined as gas prices declined.”
Although we cannot predict the future, history gives a good indication of what is likely to happen.
“Given how dynamic and unpredictable the current oil situation is, it is too early to tell whether this will be the beginning of a long-term change in buyer behavior,” Roberts said. “Either way, the directional relationship is clear: Higher gas prices mean more interest in hybrids and EVs, and increased demand can put upward pressure on prices.”
How fast can hybrid and EV prices rise in the current market?
As for how fast prices for fuel-efficient vehicles could rise amid geopolitical tensions, Roberts said it’s a supply-and-demand equation — and there are already constraints on the supply side.
“We’re in the midst of tax refund season right now, and vehicle prices automatically increase as seasonal demand increases,” he said. “This is a tailwind that is already in motion regardless of gas prices.”
The good news for buyers is that the supply situation is better than during the last major fuel price hike.
“We are currently better positioned for supply of new and used EVs and hybrids in 2022 than the last gas price increase, so it will take longer for prices to rise meaningfully,” Roberts said. “Excess inventory acts as a buffer, but it is not unlimited.”
One indicator worth watching is Tesla pricing.
“After declining for much of last year, used Tesla prices are beginning to rise,” Roberts said. “According to price trend data from CarGurus, the average used price of a Tesla has increased by about 6% over the past month, while the broader used market has increased by about 3%.”
This divergence suggests that demand for electric vehicles may already be accelerating as gas prices rise.
Why might now be the best time to buy a hybrid or EV?
If you’re in the market for an EV, now is an extraordinary time to buy, Roberts said.
“Demand has decreased, supply has increased rapidly on market days, and deals are available,” he said. “Used EVs continue to represent some of the best values in the entire used market for budget-conscious buyers looking for clean powertrains.”
However, hybrids are a different story.
“Supply is already pretty tight, so deals aren’t as generous to begin with, and any meaningful change in demand could make that situation even more challenging,” Roberts said.
“The bottom line: EV buyers have the advantage right now, hybrid buyers have less, and both could be in a tight spot if gas prices remain high.”
EV models are showing the biggest price drops right now
Despite growing uncertainty over fuel costs, many electric vehicles are still selling at significant discounts compared to last year, creating opportunities for fast-moving buyers.
According to CarGurus data, models with notable price drops include:
GMC Sierra EV
- Average price: $72,937 (down 23.5% compared to 2025)
chevrolet equinox ev
- Average price: $35,313 (down 21% compared to 2025)
Hyundai Ioniq 5
- Average price: $39,544 (down 22.6% compared to 2025)
dodge charger daytona
- Average price: $59,020 (down 13.6% compared to 2025)
Volkswagen ID.buzz
- Average price: $59,344 (down 11.8% compared to 2025)
As gas prices rise, those discounts may not last long — especially if more drivers decide that waiting could cost them more in the long run.