COX AUTOMOTIVE – The national average price for a gallon of gas moved above $4.00 and into record territory in early March, and American drivers – and media – took notice. Higher fuel costs are already adding to inflation woes, leading state and national leaders to call for “gas tax holidays” and potentially more stimulus to offset the rising costs.
The added cost to fill up impacts everyone differently, and high prices tend to drive further interest in fuel-efficient vehicles and, of late, electric vehicle solutions. Vehicle shopping traffic in the early weeks of March on Cox Automotive’s popular Autotrader and Kelley Blue Book websites, among the largest car-buying sites in the country, showed:
- EV shopping consideration rose 69% from January, when gas prices started to rise.
- Shopping consideration for hybrids increased 32% from the beginning of the year.
- Shopping for fuel-efficient subcompact and compact sedans increased 16%.
- EV shopping consideration spiked the most among non-luxury buyers – those most impacted by higher gas prices – and for electric SUVs versus cars.
- Car shoppers in the West, where gas prices are among the highest in the country and EVs are more common and accepted, showed the biggest spike in interest in EVs. The South also showed much higher interest in EVs than earlier.
But there’s one problem: New vehicles of all types are in short supply due to numerous supply chain disruptions in the past year, most notably the global computer chip shortage. More to the point: EVs, hybrids and small fuel-efficient cars are among the vehicles with the tightest supply, and there’s little indication the inventory situation will improve in the foreseeable future with further disruptions just this month caused by the BA.2 variant of COVID spreading in Asia, the Russian invasion of Ukraine and a recent earthquake in Japan.
As Cox Automotive Executive Analyst Michelle Krebs notes, “Cox Automotive data was showing a general rise in interest for EVs and hybrids even before the spike in gas prices. While high fuel costs may further accelerate the interest in fuel efficient vehicles, it is too early to tell if it will permanently change buying behavior. Near term, changing driving habits and gas consumption may be the only options for consumers.”
In other words, the U.S. auto market is still being driven by inventory, not the price at the pump.