A sharp rise in fuel costs is pushing American drivers toward a short-term alternative: renting electric vehicles (EVs).
Demand for EV rentals is climbing across the United States as gasoline prices surge past $4 per gallon, driven by supply disruptions linked to the Iran conflict. For many drivers, the switch is less about long-term environmental goals and more about immediate savings.
At Hertz stock (HTZ), requests for EV reservations rose nearly 25% in March compared with February. The company, which supplies vehicles to Uber driver rentals and Lyft vehicle leasing programs, said the strongest demand is coming from the U.S. West Coast, where fuel prices are typically highest.
Peer-to-peer rental platform Turo is seeing similar trends. EV bookings increased 11% in the last three weeks of March. On March 31 alone—when U.S. gas prices crossed the $4 mark for the first time since 2022—EV bookings were 47% higher than the same day a year earlier.
Oil Shock Drives Consumer Behaviour
The shift comes as the Iran war disrupts shipments through the Strait of Hormuz, a key route for about 20% of global oil and liquefied natural gas. Since the conflict began on February 28, U.S. gasoline prices have risen by more than a third to an average of $4.02 per gallon.
Such price shocks rarely trigger immediate changes in car ownership. But analysts say the speed and scale of this increase is forcing consumers to rethink short-term transportation choices.
In Europe, the reaction has been more pronounced. EV registrations across 15 countries jumped more than 50% in March, signaling a stronger structural shift compared to the U.S.
Rentals Rise While EV Sales Lag
Despite the spike in rental demand, US electric vehicle sales remain under pressure. New EV sales fell 25% year-on-year in March, largely due to the expiration of the EV tax credit policy, which had offered buyers up to $7,500 in incentives.
This divergence highlights a growing gap between short-term behaviour and long-term adoption. While consumers hesitate to commit to purchasing electric vehicles, many are willing to rent them temporarily to offset fuel costs.
Car Rental Gateway reported a 16% increase in EV and hybrid bookings in March, reinforcing the trend across the rental market.
Used EV market gains momentum
The surge in demand is also lifting the used EV market pricing. After months of declining values, prices began to stabilize in early March as oil costs climbed.
“We have seen EVs get a second lease on life due to the sustained pressure at the pump,” said John Coles, vice president of data science at ACV Auctions.
For rental companies, the shift could offer a financial upside. Firms that invested heavily in electric fleets may benefit if high fuel prices persist, turning what was once a risky bet into a near-term advantage.
But for now, the data suggests a clear pattern: when gasoline prices rise sharply, American drivers are willing to experiment with electric vehicles, just not commit to owning them.
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