Will the Spike in Gas Prices Influence More People to Go Electric?

Pandemic-induced supply chain issues have been influencing the car market for two years. Now, will war-induced rising gas prices cause car buyers to go electric?
Written by Kerry Gibson
Reviewed by Kathleen Flear
Mar 27, 2022
Americans are seeing a huge jump in gas prices since Russia’s invasion of Ukraine began. Certain countries, including the U.S., have responded with sanctions that ban and reduce Russian oil imports. President Biden warned this would cause
fuel
prices to rise. Debate over the demand for electric cars has ensued.
Experts don’t believe increased fuel cost will affect
car buying
. It may dictate how much
consumers
drive, but won’t necessarily change what vehicles they choose to drive. Conspiracy theorists believe it’s a ploy to force Americans to go electric, but a closer look at the EV market suggests otherwise.

The theories behind the high gas prices

It didn’t take conspiracy theorists very long to come up with outlandish reasoning for the recent hike in gas prices. The narrative among these social media users revolves around the administration intentionally driving up the price of gas to encourage Americans to drive electric cars, as reported by
ABC News
.
The motive for these speculations being that the government could control these EVs, shutting down a driver’s car at will. This comes on the heels of Biden’s infrastructure law that passed last year, funding public transportation and electric vehicles. The federal government announced $5 billion to build a nationwide electric vehicle network. The goal is for all communities, rural and urban, to benefit from the gas savings while driving an EV.
Information actually suggests that the U.S.-imposed sanctions on Russian oil is what’s driving the uncertainty and scarcity within the petroleum industry. According to
CNBC
, the national average for a gallon of gas is $4.06. This recently climbed 45 cents in a week, or $1.30 over the course of 2021.

Does this mean more electric cars?

Data from the automotive industry states that electric cars and hybrids only represent roughly 2.4% of the total current vehicle inventory in the U.S. Due to ongoing supply chain issues caused by the pandemic, levels have dropped 60 to 70% since 2020. Even if people want to buy electric cars, the majority of vehicles on dealership lots are already spoken for.
Regardless of rising gas prices, the high demand for all vehicles right now negates any expected savings for buyers. Put plainly, buying an electric vehicle is expensive at the moment. 
Automakers have been focused on the production of trucks and SUVs, like the Ford Escape and Dodge Ram 1500. Availability is scarce for smaller cars, EVs, and hybrids.
Fox Business
compares the costs of charging electric cars to the spike in gas prices, and the values were surprising. Most electric car owners are using a 240-volt charger at home or destination chargers in public. This can typically take eight hours to completely recharge, costing an average of 13 cents per kilowatt-hour.
For owners that are recharging their EVs using the convenient fast-charging stations, electricity rates are as high as 43 cents per kilowatt-hour. The cost is slightly reduced with a monthly membership. Recharging is complete in as little as 18 to 40 minutes.

Should I go electric?

Unless gas prices continue to rise for an extended period of time, electric cars may cost roughly the same as their gasoline-powered counterparts. Granted, there are other benefits to EV ownership, but buyers should beware that it may not be a cost-effective decision at the moment.
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Aig
Chubb
ClearCover
CSE
Dairyland
DirectAuto
Elephant Auto Insurance
Kemper
Libertymutual
Gainsco
Mapfre
Mercury Auto
Metromile
Nationwide
Plymouth Rock
Progressive
State Auto
Safeco
Travelers
Metlife
Bristol West

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