High gas prices are pushing many Americans to switch to electric vehicles (EVs) to save money by avoiding the price at the pump.
- The average price of gas in the U.S. is currently $3.59, according to AAA, and to fill the average American car holding 15 gallons would cost $54.
- For an EV, it depends on where you live and how long the car needs to charge for, but a full charge typically costs under $20 of home electricity.
- As gas prices rose significantly in 2022, EV sales followed with a 70% increase in EVs and a 25% increase in hybrids during the first half of the year, according to Cox Automotive.
- In 2019, just 3% of U.S. motorists said their “intention” was to buy a battery-electric vehicle the next time they were in the market. By January 2022, that figure rose 10%, and nearly a quarter of the people surveyed said they would consider changing the type of vehicle they buy if fuel prices keep rising, according to NBC.
Why it’s news
The U.S. is attempting to boost EV adoption to decrease emissions in the country by offering up to $7,500 in tax credits, but another thing is pushing Americans to go electric—high gas prices.
Over the last year, gas prices in the U.S. have hit record highs leaving many Americans to struggle to fill their gas tanks. Average U.S. gas prices topped $5 per gallon in June 2022, leading many consumers to scale back their driving and look for other transportation options.
Transportation accounts for nearly 30% of American emissions. To eliminate that number, the U.S. is pushing for EV adoption, urging consumers to switch from gas-powered cars to electric.
To help push more people into the transition, President Joe Biden implemented the Inflation Reduction Act that will give up to $7,500 in tax credits to purchase eligible vehicles.
Americans have been curious about EVs, but more than 50% of Americans say affordability is their primary concern for EVs, and 70% say they expect to pay less than $50,000 for their next car, according to a Deloitte study.
Between the high gas prices and the newly instated affordability of EVs, more Americans have been looking to buy EVs over traditional gas-powered cars.
“Gas prices have really pushed shoppers to consider EVs that otherwise wouldn’t have sooner,” says CarGurus customer insights analyst Ali Chapman. “And it’s led to increased activity in EVs on our site.”
Google searches for EVs have also been boosted by gas prices, reaching a record high in March of 2022 when gas prices were at extremely high levels.
EV manufacturers began feeling the push of gas prices as well. Tesla generated a record profit of $3.32 billion in the first three months of 2022, with sales of its vehicles jumping roughly 80% from the year before, according to Time.
German automakers Volkswagen and Mercedes also reported a bump in sales for their electric vehicle fleets, up 65% and 37% during the same period.
When gas prices first started rising, EVs were more challenging to come by due to lasting supply chain issues from the pandemic and the ongoing war in Ukraine, which made parts difficult to obtain.
Now that the U.S. is pushing for EV adoption, it has dramatically dropped EV prices and made EVs more accessible. The $7,500 tax credit stipulates that most vehicle parts must be manufactured in the U.S.—boosting internal production and easing America’s reliance on China for vehicle parts.
Requiring that the EVs must mostly be American-made has forced many manufacturers to start sourcing and building parts domestically to ensure their vehicles receive the tax credit. This makes the vehicles more readily available in the U.S. for consumers to purchase.
Currently, the Biden administration estimates about 3 million cars in the U.S. are electric, which is approximately 1% of the total. Although that is still a very small percentage, the number has grown heavily over the last few years.
America continues to push for electric adoption, and as vehicles become more affordable and gas prices continue to fluctuate on the high-end, many experts believe the total number of EVs on the road will continue to grow quickly.