John Paul Helveston, George Washington University

Within three months of the U.S. and Israeli strikes on Iran on Feb. 28, 2026, the average price of gasoline for American drivers climbed from US$2.94 to $4.35 a gallon. If there was ever a moment for Americans to switch to electric vehicles, this was it.

From March to May 2026, in fact, sales of hybrid electric vehicles were 18% higher than over the same months in 2025.

But sales of fully electric vehicles were 16% lower from March to May 2026 compared with the same months in 2025. Some observers took that as evidence that high gas prices alone wouldn’t push Americans toward fully electric cars, but that conclusion misses half the story.

I study car buyers and their preferences, and there is an important distinction between what consumers want and what they can actually buy. Sales reveal what cars people actually bought, but not necessarily what they actually wanted.

When the supply of some kinds of cars can’t keep up with demand, prices rise, and that’s exactly what happened for electric vehicles in 2026.

An industry in retreat

In 2026, hybrids and all-electric vehicles faced the same jump in demand from the oil crisis. While there were plenty of hybrids available to meet that demand, the same was not true for EVs.

Hybrid production had been growing for years, led by Toyota, which sells about half of the hybrids bought in the United States. As a result, even as sales surged, hybrid inventories on dealer lots were 19% higher in March 2026 than they had been a year earlier.

However, EV production had been in retreat since the tax and spending law President Donald Trump signed in July 2025 ended federal tax credits for EVs. Buyers had been able to get up to $7,500 for new EVs and $4,000 for used ones, but that ended after Sept. 30, 2025.

Automakers responded by cutting back their EV production. General Motors laid off more than 3,400 workers at its EV and battery plants and shifted its Tennessee plant to make batteries for energy storage, not cars. Ford wrote off $19.5 billion from its EV business, ended production of the all-electric F-150 Lightning and converted a Tennessee EV plant to build gas-powered trucks.

Buyers, for their part, rushed to beat the tax credit deadline, pushing EVs to 11.3% of new vehicle sales in September 2025. But by November 2025, after the tax credits ended, their share dropped to 4.3%.

As 2026 progressed and gas prices began to rise, so did EV demand. New EV inventories declined, shrinking from about 130 days of supply in the first quarter of 2026 to 78 days by August – just two days above the supply level of gas-burning cars.

Discounts on new EV models shrank too. My analysis of online listings from marketcheck.com shows the median new EV was listed 9.8% below sticker price in February. By April, the median discount was 6.6%, and 4.7% in June. That’s a sign that dealers saw rising demand, not inventory to clear.

A run on used electric vehicles

Before the war, prices for used electric vehicles were still drifting down in the wake of the expired used EV federal tax credit. After the war began, they climbed 13% through late June 2026. For a typical used electric vehicle, that’s about $3,500 more.

Other data sources point in the same direction. Recurrent, a company that reports on batteries and used EVs, found that the price of a used 2023 Chevrolet Bolt rose almost 20% from January to June 2026.

And inventories of used electric vehicles dropped too, with only 31 days of supply in May, 23% below the year before.

A costly misreading

None of this means the electric vehicle market is healthy. High prices and uncertain access to charging stations are real stumbling blocks for people who are thinking about buying an EV.

But the data doesn’t support the claim that electric vehicle sales stalled in 2026 because Americans don’t want them. Rather, the sales stalled because there weren’t enough EVs available to buy – and there were plenty of hybrids as an alternative.

The distinction matters because automakers have treated a change in the policy landscape as a change in consumer demand, leading to shortages with real costs.

The average new car now sells for about $50,000 and the average new electric vehicle for about $55,000, according to Kelley Blue Book, a company that tracks car prices.

The current situation leaves drivers exposed to the volatility of oil prices with fewer alternatives. The U.S. is the world’s largest oil producer, yet a war in the Persian Gulf raised gas prices significantly in just three months. Oil trades on a global market, so American drivers pay global prices.

Seven months into the war, the pressure on drivers is still going full throttle. Oil was still above $100 a barrel in mid-October, and diesel hit a record $6.52 a gallon on Sept. 22.

Electric vehicle sales haven’t caught up. Argonne’s data show 86,000 of them sold in August, fewer than the 101,000 sold in May, while hybrid sales stayed above 216,000 a month all summer.

A look ahead

Rather than move to increase electric vehicle supply and make them more affordable, federal policy continues to hinder the U.S. electric vehicle sector.

The fuel economy rule released Sept. 28, 2026, loosens efficiency requirements for gas-powered vehicles and in 2028 ends a system that let automakers that beat the standards – mostly EV makers – earn credits for exceeding them and sell those to automakers that fell short. That means automakers will have fewer regulatory incentives to produce EVs going forward.

Regulators say buyers will save $1,289 on the purchase price of a new gas-powered vehicle from reduced engineering and manufacturing costs to make less efficient engines. But the same analysis estimates drivers will spend about $1,600 more on gas over the life of the car, and that’s using fuel price forecasts well below today’s prices. Economists say the administration’s math does not properly account for those fuel costs.

The U.S. has also effectively shut out Chinese automakers, even though nearly three-quarters of the world’s electric cars are built in China. In 2024, Chinese car buyers could choose from over 130 EV models priced under $40,000; American buyers had just four EV models under that threshold. Beyond tariffs of more than 100% on EVs made in China, a Commerce Department rule bars cars from Chinese-linked automakers starting with model year 2027, even if they are built in the U.S. A bill pending in Congress would widen the ban, blocking Chinese investment in U.S. auto factories altogether.

As long as gas stays expensive, the gap between the electric vehicles Americans want and the electric vehicles dealers can sell them is likely to remain. Decisions such as ending the tax credit, rolling back fuel economy standards and banning Chinese technology all make it harder to build them, which means Americans will continue to have fewer affordable electric vehicles to choose from.

John Paul Helveston, Associate Professor of Engineering Management and Systems Engineering, George Washington University

This article is republished from The Conversation under a Creative Commons license. Read the original article.