High Gas Prices and Tesla Sales: A Complex Relationship
US Petrol Prices and EV Market Dynamics
US petrol prices surpassed $4 per gallon for the first time in four years, reaching a 30% year-over-year increase. This surge is attributed to the Iran conflict and disruptions in the Strait of Hormuz.
Tesla's Q1 2026 Performance
- Delivery Numbers: Tesla delivered 358,023 vehicles in Q1 2026, a 6% increase from the previous quarter, but missing estimates by 7,600 units.
- Market Share: Despite competitor sales declines, Tesla's US EV market share rose to 54-58%.
- Revenue and Earnings: Revenue reached $22.39 billion, up 16% YoY, while net income was $477 million, a 17% increase. Earnings per share were $0.41, beating estimates by $0.03.
Gas Prices and EV Interest
While high gas prices are often assumed to boost electric vehicle (EV) sales, the current market trends tell a more nuanced story:
- Rising Interest: Edmunds data from March 2026 showed a weekly peak in electrified vehicle consideration at 23.8%, up from 22.4% the week prior. Cox Automotive reported a 20% increase in new EV sales from February to March, with a 16% quarterly rise in interest compared to Q4 2025.
- Used EV Sales: Used EV sales rose 12% to 93,500 units in the quarter, closing the price gap with equivalent petrol cars to just $1,300.
- Declining New EV Sales: Total new EV sales in Q1 2026 dropped by 28% YoY to between 212,600 and 216,400 units, with January seeing a significant 41% year-over-year decline.
The Missing Piece: Tax Credit Expiration
The key factor missing from the narrative of gas prices boosting EV sales is the expiration of the $7,500 federal tax credit for EVs. Despite rising interest and price proximity to petrol cars, this absence significantly impacts overall EV market growth.