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A broad shift to electric vehicles would benefit drivers of gas-powered cars by lowering the price of fuel. That is the finding of a new study, which comes as the war in Iran rattles energy markets, driving up the cost of oil.
The study modeled the impact on gas prices of two major policies to speed the adoption of electric cars, both of which have been targeted by the Trump administration for rollback. One is the more stringent fuel standards put in place under President Biden, which the Trump administration is now aiming to weaken. The other is a mandate in California, taken up by 17 other states, that every new car and truck sold be zero-emissions by 2035. The administration is suing California to block the mandate.
If those policies were to stay in place, the new study finds, then roughly four out of five cars sold nationally would be electric in 2035. By curbing demand for oil, drivers of EVs would lower the price of gasoline by 4 percent. Further, the shift to electric cars would help spur advances in battery technology, lowering the cost of batteries added to the power grid, which in turn could help lower electric bills. The study was published in the journal Energy Policy.
Currently, oil prices are surging owing to the recent closure of the Strait of Hormuz, through which roughly a fifth of the world’s oil flows. Following dire threats from President Trump, Iran agreed Tuesday to temporarily reopen the strait. But even if normal trade resumes, prices are likely to remain high for months, according to the U.S. Energy Information Administration.
Governments around the world have responded to the energy crisis by cutting taxes on fuel, slashing fares for public transport, mandating days off, and encouraging work from home, among other measures.
Among drivers, high prices are spurring greater interest in electric vehicles, a trend previously seen after Russia’s 2022 invasion of Ukraine rattled energy markets. “We are in the middle of the second energy shock in the 2020s,” Kingsmill Bond, of energy think tank Ember, told Bloomberg. “It will flow into people’s decisions on what energy-hungry devices they buy.”
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