High Gas Prices Drive Up Interest in Electric Vehicles

When Eric Dirksen received his first electric car in December—a new Tesla Model Y—he didn’t know gas prices would spike a few months after. But with fuel costing about $4.20 per gallon on average this week, he’s happy with the decision.

“Very fortunate at the timing,” he says. Dirksen spent approximately the same amount of 15 gallons on gas as $62 in charging the car over the past month. “I wanted to be more intentional with ensuring I was doing what I could to ensure a sustainable future for my daughter. It was the obvious choice,” Dirksen says of his purchase. “The savings are still mind blowing to me.”

According to new data, Dirksen is more likely to choose fuel-efficient cars to reduce gas costs as the price of gasoline has been high for three straight months.

CarGurus, an auto research and shopping company, has yet to release a report showing that 53% say they would consider buying a fuel-efficient car in order to reduce their dependence on gasoline prices. TIME has shared this data which is based on an internet survey of 276 U.S. auto owners. The survey shows that 42% of Americans expect to have an electric vehicle within the next 5 years. This is up from 30% in 2012 and 32% last February.

“Gas prices have really pushed shoppers to consider EVs that otherwise wouldn’t have sooner,” says Ali Chapman, a senior customer insights analyst at CarGurus. “And it’s led to increased activity in EVs on our site.”

Google searches about electric cars also increased due to the record-breaking gas prices in March. These are affecting the whole auto industry. In recent months, electric vehicle companies have experienced record-breaking sales. This is far beyond Wall Street’s optimistic expectations.

Tesla, which is the biggest manufacturer of electric cars, made a record profit, $3.32 billion, in its first three months 2022. Sales of Tesla’s vehicles increased almost 80% over the previous year. German carmakers Mercedes and Volkswagen also saw an increase in electric vehicle sales, with their respective numbers rising by 65% and 37% respectively.

CarGurus data shows that consumers’ buying patterns are more complicated than ever, despite an increase in activity and sales. In a survey of respondents last year, 56% said they’d be much more likely to consider an electric vehicle if gas prices reached $5/gallon. Today that number drops to 27%, which is more realistic.

“The initial shock of paying $5/gallon really kind of gets people looking,” says Kevin Roberts, director of industry insights and analytics at CarGurus. “But then as that awareness grows, interest slips out.”

Supply chain issues, including shortages of lithium-ion battery and semiconductors, are also affecting EVs’ interest. This makes it more difficult for customers to drive home in an electric car. LONG wait lists have plagued electric vehicle production for almost one year.

It’s made finding an electric vehicle take a little bit of luck—and a little more from your wallet. At many dealerships, only a small handful of EVs—if any—are available. The average time it takes to order one can be over a year. Additionally, some dealers have only pre-owned inventory. The problem isn’t just the chip shortage, but that demand is significantly outpacing production.

On April 20, Ford shut down orders for the rest of the year on the Mach-E, its signature electric crossover, dubbed Car and Driver’s electric vehicle of the year, meaning anyone who wants to buy one will have to pay a premium price. “Most people come in here to ask about the Mach-E,” one Ford salesman said last week, citing higher than normal gas prices as the reason for increased interest. “If we had more of them they would sell the fastest.”

Although carmakers raise their prices to compete with electric vehicles, the majority of consumers want them. “Two-thirds of people say that they agree EVs are the way of the future,” Chapman says. “They seem somewhat inevitable.” Experts say it will take time, as less than 1% of the 250 million cars on the road today are electric, but high gas prices could be one way to encourage switching.

“EV interest is going to continue to grow organically over time,” Roberts says. “Gas prices just kind of accelerate that.”

Experts now look back to the 2008 financial collapse as a possible example of what might happen in electric vehicle manufacturing. Roberts claims that consumers changed their driving patterns and bought more electric cars as gas prices rose in 2008.

“But then when those gas prices went back down, people went back immediately to what their previous practices were before.”

Here are more must-read stories from TIME

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