A gas station in Los Angeles on March 10. Mike Blake/Reuters
Life at $4 a gallon
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By Claire Brown |
Average U.S. gasoline prices hit $3.98 per gallon on Tuesday, according to AAA, on the cusp of a level that was last hit when Russia invaded Ukraine in 2022.
The last month has seen the second-largest gas price spike in three decades, with average prices climbing more than 30 percent since the war in Iran effectively shuttered the Strait of Hormuz, a narrow waterway that conveys up to a fifth of the world’s oil.
Though there’s no hard and fast rule that dictates exactly what choices consumers make at $4, $5, and $6 per gallon, higher gas prices are already stressing household budgets. At $4 per gallon, more than half of Americans said they’d change their driving behavior, according to a 2022 survey by AAA. More recent data has also shown that Americans are delaying some forms of spending.
The energy shock has hit Asia hardest: The Philippines declared a state of emergency on Tuesday, and President Ferdinand Marcos Jr. said grounding planes because of a jet fuel shortage was a “distinct possibility.” South Korea is urging citizens to ride bicycles instead of driving.
Transportation, of course, is the single-largest source of planet-warming greenhouse gas emissions in the United States, and a big contributor globally. Here’s what we know about how a long period of high gas prices could change how willing people are to drive gas-powered vehicles, both here and abroad.
Driving less, window-shopping
Already, Americans are looking for ways to cut back. In New Orleans, drivers are lining up at gas stations with the best prices. Michele Tafoya, a Republican candidate for the U.S. Senate in Minnesota, encouraged people to take “one less trip to Starbucks.” The state of Georgia has implemented a fuel tax holiday, waiving a 33-cent-per-gallon tax.
When gas prices spike, drivers tend to respond by cutting out unnecessary trips, by car-pooling and using public transportation, according to AAA. Spending on discretionary expenses like plane tickets and restaurant meals has fallen, too, as transportation costs eat up a bigger share of household budgets.
Yet while plenty of people who own electric vehicles have been boasting about their fuel savings on social media over the last few weeks, gas prices would have to stay high for a much longer period of time to trigger a broader shift away from gas-powered vehicles, according to Stephanie Valdez Streaty, research and development director at Cox Automotive, a research firm.
Still, the war in Iran appears to have driven a modest uptick in E.V. curiosity among U.S. drivers, according to the car shopping site Edmunds. If high prices persist, more people may feel the urge to hop off what Jessica Caldwell, the head of insights at Edmunds, called the “gas price roller coaster.”
New E.V.s in the U.S. are still more expensive than gas-powered cars, but the gap is closing for used vehicles. In February, the average listing price for a used E.V. was $34,821, about $1,300 more than a gas-powered car, Valdez Streaty said.
Hundreds of thousands more used E.V.s could enter the market this year as leases expire, Valdez Streaty said. “Consumers are going to have a lot of good options at a lower price point,” she said.
The global E.V. tipping point
If you’re curious about buying whether the economics of buying an E.V. are in your favor, The Times has a calculator that can help. The math looks very different abroad, where gas price shocks have been more intense and E.V.s are often far more affordable than in the U.S.
The scales could tip fastest in countries with access to inexpensive Chinese E.V.s, like Brazil, parts of Asia and soon, Canada, wrote David Brown, the director of energy transition research at Wood McKenzie.
In Vietnam, for example, gas prices have risen by around 30 percent since the start of the conflict. But the increase coincides with a rapid increase in the share of electric cars sold each year as government incentives meet affordable options from local manufacturers.
In December, the Vietnamese E.V. maker VinFast broke records when it reported the highest monthly sales volume ever recorded by any automaker in the country. Its best-selling car last year, the VF 3, hit the market in 2024 at just under $13,000.
VinFast has begun offering discounts of 3 to 5 percent to people switching from gas-powered cars and scooters, Reuters reported.
