On paper, high gas prices should help EV companies. As gas moves above $5, this should happen, on paper.
There are several reasons this won’t work for Tesla (NASDAQ: TSLA | TSLA Price Prediction), for now. The first was recently described by an expert. Morning Brew reports, “It typically takes three to six months of persistently higher gas prices for consumers to start considering more cost-effective alternatives, according to former chief economist of GM Elaine Buckberg.” And, America is barely two weeks into $5 gas territory. The current price for a gallon of regular is $3.96. This is up from $2.93 a month ago. It’s a long way to $5.
The market is awash in used EVs. Some are coming off three-year leases. Others were trading in for different cars, whether gas-powered or newer EVs. According to Yahoo, “Research from data firm Recurrent estimates that as many as 500,000 EVs could come off lease in 2026 alone, with that number nearly doubling in 2027.” Check out the only used-car site: Carvana. There are plenty of used Teslas for $25,000. New Teslas still sell for $45,000, even for the low-end Model 3.
Hybrid cars are in vogue. It allows people who don’t want an electric car to go halfway there and still rely on more traditional power sources.
The EV tax credit is gone. EV sales collapsed after the credit was eliminated on September 30. The $7,500 benefit is between 15% and 20% of the sticker price of a modestly priced EV. That’s a big price difference to handle for most people.
Perhaps the biggest challenges are the old challenges. EV charging takes a long time. There are not enough public charging stations. The range of a typical EV is still only 300 miles on a full charge. EVs eat through tires. EVs don’t fully charge when the temperature drops well below zero.
That is a long list of things stacked against a new Tesla purchase.
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