When gasoline prices surged from $2.94 per gallon to $4.35 in the three months after U.S. and Israeli strikes on Iran, electric vehicles should have been an obvious beneficiary. Instead, battery-electric vehicle sales fell 16% compared with the same period in 2025, a decline that looks like consumer rejection but is actually a supply failure. Americans are struggling to find electric vehicles at the very moment they are most attractive, and the shortage has broad implications for the pace of the country's energy transition and for the automakers that bet heavily on electrification.
The contrast with hybrids is telling. Hybrid sales climbed 18% over those same months, partly because the vehicles were actually available. Dealerships carried 19% more hybrid stock in March than twelve months prior, reflecting years of expanding hybrid output. The EV picture looked nothing like that. A federal incentive worth up to $7,500 was removed at the end of September 2025, and manufacturers responded by cutting output sharply.
The retreat was severe. General Motors eliminated more than 3,400 positions across its EV and battery operations and redirected a Tennessee facility toward grid-level energy storage. Ford absorbed a $19.50 billion write-down on its EV operations, halted the making of the fully electric F-150 Lightning, and repurposed another facility for gasoline-powered trucks. EVs briefly hit 11.30% of new car purchases in September as buyers rushed ahead of the credit deadline, then collapsed to 4.30% two months later. By the time gas prices rose again, the inventory had dried up: new EV supply fell from around 130 days of supply in the first quarter to 78 days in August, while used EV prices climbed 13% by late June and available stock shrank to 31 days' worth in May.
Policy is making a recovery harder. Rules issued September 28 loosen fuel-efficiency requirements for gasoline vehicles and phase out a credit-trading system in 2028 that had given manufacturers a financial reason to produce EVs. Government analysis suggests the change saves buyers about $1,289 at purchase but projects they will spend roughly $1,600 more on fuel over the vehicle's life. Access to cheaper models from abroad is also blocked by policy. China accounts for roughly three-quarters of global electric car production, and in 2024 buyers there could choose from over 130 electric models priced below $40,000, versus just four for American buyers. Import duties exceeding 100% on Chinese-made vehicles, a Commerce Department rule barring cars from manufacturers with Chinese ties from model year 2027, and pending legislation blocking Chinese investment in U.S. auto factories mean that gap is unlikely to close soon. Unless the U.S. reverses course, EV makers such as Massimo Group (NASDAQ: MAMO) could face an uphill task growing sales in the coming years, and American drivers will keep paying more at the pump for a choice that policy has quietly removed.
