Rising Gas Prices Fuel EV Demand, but at What Cost?

The electric vehicle market is experiencing a surge in demand due to rising gas prices, but this growth comes with a catch: it's putting pressure on car manufacturers to raise their prices.

According to HERE Technologies and SBD Automotive, over half of US drivers surveyed said they're more open to considering EVs than they were last year, and 57% said gas prices influenced their interest. Meanwhile, Cox Automotive found that 56% of shoppers say rising gas prices have made them more likely to consider a hybrid or plug-in hybrid car.

The problem lies in the fact that US carmakers had pulled back on electric vehicle production, and any ramp-up would require buying large quantities of copper, whose price has climbed as much as 20% this year. The issue is not just about availability but also the high cost of extracting the ore.

As a result, EV makers are facing pressure to raise their prices, which were already higher than those on cars powered by traditional combustion engines. In August, US buyers paid an average $54,813 for new electric cars, a premium of 9.4% compared with the market as a whole.