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USsales of new electric vehicles have cratered since late last year after hitting an all-time high in 2025’s third quarter, when federal rebates ended. And industry forecaster Cox Automotive expects the segment to drop 28% in this year’s first quarter from a year ago.

So with gasoline prices continuing to spike as President Trump’s war with Iran grinds on, up more than a $1 in the past month to a nationwide average of $4, will the slump end? Maybe, but not right away. That’s because even though fueling a car with electricity is cheaper than buying gasoline, the average price of new EVs remains above the internal combustion variety by about $6,000.

Still, more Americans are at least starting to look at them.

“Electrified vehicle consideration remains elevated compared to earlier in March, before the recent run-up in gas prices tied to geopolitical tensions,” said Jessica Caldwell, chief analyst for car-shopping site Edmunds. But higher prices will “need to be sustained or more pronounced to drive a meaningful shift. Right now, many consumers appear to view the latest spike as temporary,” she said.

EVs are also just too pricey for most shoppers, who also have concerns about easy access to charging, according to Cox. While new, affordable models like GM’s revived Bolt, starting at $29,000 and Nissan’s revamped $30,000 Leaf will be attractive to some, there are still too few options below the current median new vehicle price of $49,000. Meanwhile, the U.S. market is overloaded with pricey, premium electrics selling for well over $60,000. That space is being thinned out, however, with Tesla killing off its high-end Model S and X and Honda and Sony axing their $100,000 Afeela luxury sedan just as it was about to go on sale in California.

It remains to be seen if new EV sales can start growing again, but the used market is already on track to rise 12% in the first quarter, according to Cox. That’s certainly what Alex Krafcik, who worked for Tesla’s used vehicle operations and now has his own store, Surplus EV, in Pasadena, California, is seeing.

“Can’t do a year-over-year [comparison] since I opened at the end of May 2025, but month to month I’m turning inventory more than twice as fast,” he told Forbes. “I’m seeing used EVs sell at auction for thousands over the recommended wholesale price, so I don’t think it’s just me either.”

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Why The World Is On The Verge Of A Bigger Oil Shock Than 1973

This has been a dangerous month to be an oil refinery. Last week, a fire hit Valero Energy’s 435,000-barrel-per-day refinery in Port Arthur, Texas. The refinery, 90 miles east of Houston, has been ramping up purchases of heavy crude from Venezuela. Despite a dramatic fireball, there were no serious injuries and damage appears limited to a diesel processing unit.

Meanwhile, Russia’s giant oil export facility at Primorsk on the Baltic Sea wasn’t so lucky and continued to burn two days after a Ukrainian attack. Other smoldering oil and gas plants include Saudi Arabia’s Ras Tanura, hit by Iranian drones on March 2, and Tehran’s biggest refinery, hit by Israelis on March 7. Then on March 19 more attacks hit the Saudis’ refinery at Yanbu, on the Red Sea, and Israel’s refinery in Haifa, causing minor damage to both.

Then came the drone attacks last week on Qatar’s Ras Laffan complex, which knocked out plants operated by ExxonMobil and Shell responsible for some 20% of Qatari natural gas exports. QatarEnergy says that damage could take 5 years and $26 billion to repair.

Worst of all: Iran’s blockade of the Strait of Hormuz, which is keeping upwards of 18 million barrels per day of oil, gas, fertilizer and other chemicals bottled up in the Gulf. Only a handful of the usual 100 ships per day have been making the crossing, though Iran reportedly said on Tuesday that vessels from “non-hostile” countries would be allowed.

Tom Steyer, cleantech investor and California gubernatorial candidate, on the Iran war’s impact on agriculture and how he’d lower electricity prices

When your campaign got going, you focused on California’s high electric power costs. Now with the war in Iran, there’s the added factor of spiking fuel prices. How does this affect your campaign messaging?

To be fair, the fossil fuel basis for fertilizer also means that a lot of the fertilizer in the world comes out of the Persian Gulf and gets shipped through the Strait of Hormuz, including to American farmers. And this is planting season.

What that means is it ain’t getting through. Which means that food prices are also going to go up.

Rising fuel and fertilizer prices are presumably a big problem for California’s Central Valley farmers?

Oh yeah. It's partly the cost, but it's also a question at some point, believe it or not, of availability if it can't get through the Strait of Hormuz. Maybe that changes, but does it change in time for planting season?

This is a true disaster. We're talking about the effects specifically, directly on fossil fuels–which is electricity, transportation and fertilizer.

I think the right way to think about this for fertilizer for the U.S. is more about price and less about supply. It's sort of like that's really what's going to hit gasoline prices. Not supply. It's a global product. ... These are global markets, and when the global markets move, you raise your price.

One of your campaign points is about cutting California utility rates by 25%. How would you do that?

There’s two things we can do in the short run, in the reasonable short run. First of all, change the way the Public Utilities Commission incents these utilities, because obviously they have very perverse incentives. The way the structure works, they have incentives to make as much capex as possible and get a guaranteed rate of return.

Obviously what that means is they make as much capital expenditures as they possibly can, get them into the rate base and charge for it. We really need to change that because they have no incentive and therefore they have no incentive to do a whole bunch of things that are very good for rate payers.

And what would those things be?

There are a bunch of different ways to get additional capacity on the grid. One way is to build more grid. And by the way, that costs tens of billions of dollars and is a pretty good damn deal for the utilities. The grid is maybe 35% efficient–35%. And that's because of a whole bunch of rules designed to protect the grid for the highest one hour of the year so we don't get a brownout or a blackout. Well, it turns out that we can be much more effective than 35% by using different real-time information technology, artificial intelligence, to actually raise that from 35% to 60%, which means you just found immense capacity on the grid, not for free, but a fraction.

So the first thing is oversight [of utilities]. And the second thing is it's a legal monopoly. Other states don't have legal monopolies. We have a legal monopoly, and so you can't compete. We need to introduce localized competition, making it possible for people to generate and do microgrids.

Such as allowing property owners or communities to set up solar and battery projects and sell energy through power purchase agreements?

Exactly. And that's not something that's not possible. It’s something made possible by changing a couple rules. … We’ve got to change that.

The cost of renewable energy is plummeting. The cost of battery storage is plummeting. Everyone is having their rates around the world plummet, except, oh, us. We have a legal monopoly from the early 20th century telling us that's illegal and all the technology's coming from us. All the stuff I'm talking about is originally California technology.

If you become governor, will there be support from the state legislature to make these kinds of changes?

We'll get that done. It's just a better deal for everybody. And when people say, “you can't reduce it 25%,” which I hear a lot. “It's impossible.”

Really? Because you know what that means? We're paying 50% more than everybody else in the United States of America. You consider that a win? I don't consider that a win. … I consider [25%] a first step.

The other thing that people are not looking at … is there's just amazing technological advances in energy, in electricity, in storage that is going on. It's frenetic. And the idea that in 20 years ... I just think the cost and availability ... I’d just draw your attention to how much independent electricity generation is being done around the world. You look at Germany, Pakistan, you look at all these countries in Africa, it's sort of like, "You know what? No government, no utility. I'll just do it.”

If ever there's a time when we should be pushing this transition as hard as possible it’s now. Because I know it's a cliche, but solar and wind doesn't have to go through the Strait of Hormuz.

What Else We’re Reading

To keep climate science alive, researchers are speaking in code. Words considered "woke" are vanishing from National Science Foundation proposals (Grist)

Trump administration seeks Endangered Species Act exemption for oil, gas projects in the Gulf of Mexico (Associated Press)

Wealthy investors are targeting foes of clean energy – and are starting in Texas (New York Times)

The U.S. has caused $10 trillion worth of climate damage since 1990 (The Guardian)

Ohio blocks big solar farm, despite apparently fake public comments (Canary Media)

Iowa’s cancer crisis linked to pesticides, PFAS, fertilizer and radon (Inside Climate News)

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