History has shown that oil price shocks can lead to structural changes in consumer car-shopping habits. The 1970s energy crisis led U.S. car buyers to opt for smaller vehicles, which favored Japanese automakers and eroded their U.S. rivals’ market share.
Analysts say the recent sharp increases in fuel prices likely will not significantly alter shopping patterns for new cars right away. It often takes a sustained period of elevated prices, or for them to eclipse a psychological milestone before car buyers shift their focus to more fuel-efficient choices, industry watchers said.
“Consumers are highly reactive to gas prices, but it tends to be that it has to hit a certain round number,” said Kevin Roberts, director of economic and market intelligence at online marketplace CarGurus. “The $4 (per gallon) threshold may be the one to watch,” he said, noting that was a tipping point for EV interest during the last oil shock, in 2022, after Russia invaded Ukraine.
An uptick in EV interest is more likely in Europe, where fully electric cars accounted for 19.5% of sales last year, and where government tax breaks for electric purchases are being reintroduced.
In Germany, EV-related traffic for online car dealer MeinAuto has increased by 40% since the start of the Iran war. “Our consultations have also revealed that many people are currently focusing more intently on the running costs of their cars,” the company said in a statement.
In a survey of 1,164 people conducted on March 12 in Germany by online marketplace Carwow, 48% of respondents said that spiking fuel prices “would influence their decision to consider an EV or hybrid.”
Between March 2 and March 12, up to 66% of shoppers were looking at EVs, up from 55% at the end of February, Carwow said.