U.S. Drivers Rent EVs as Iran Conflict Pushes Gas Over $4

U.S. drivers rented more electric vehicles in March as the national average price for gasoline rose above $4 per gallon. Rental platforms and used-car marketplaces reported higher demand for EVs following disruptions to shipments through the Strait of Hormuz.

Hertz recorded nearly a 25% month-over-month increase in EV reservation requests in March, with the largest gains reported on the U.S. West Coast, according to Doria Holbrook, executive vice president of Hertz’s mobility division. Peer-to-peer platform Turo reported an 11% rise in EV bookings in the last three weeks of March compared with the three weeks before, and on March 31 Turo’s EV bookings were about 47% higher than on the same date a year earlier. Digital booking service Car Rental Gateway logged a 16% increase in EV and hybrid reservations in March.

The jump in pump prices followed a U.S. strike on Iran at the end of February and Iran’s closure of most shipping through the Strait of Hormuz, a waterway that moves roughly one-fifth of global oil and liquefied natural gas shipments. The U.S. Energy Information Administration reported that average U.S. pump prices climbed more than one-third since the conflict began, reaching about $4.02 per gallon.

Industry data show mixed signals for longer-term EV adoption. New EV sales in the U.S. fell about 25% in March year over year, a decline linked in part to the expiration of a $7,500 federal tax credit late last year. At the same time, used EV demand strengthened and prices that had been falling began to stabilize.

John Coles, vice president of data science and analytics at ACV Auctions, commented, “We have seen EVs get a second lease on life due to the sustained pressure at the pump.” He linked the recent firming of used EV values to the rise in oil prices earlier in March.

Automakers reported changes in buyer interest. Tesla noted a rebound in global demand with modest U.S. growth; the company’s chief financial officer attributed part of the uptick to higher gasoline prices. Tesla also plans to increase capital spending sharply this year, with planned outlays above $25 billion compared with roughly $8.5 billion last year.

The shift toward EVs was visible in other markets. The U.K. recorded 86,120 EV sales in March. In Germany, searches for electric cars rose to about 36% of all searches and dealer inquiries for used EVs increased roughly 66% from February. South Korea reported more than double the EV registrations in March compared with earlier months. New Zealand posted its biggest week for EV registrations since late 2023. In Nepal, EVs made up about 76% of new-car sales in 2024.

Rental companies reported that many renters are using EVs as a short-term way to avoid higher fuel bills. Industry participants noted that future new-car sales will be influenced by gasoline prices, federal incentives and availability of used electric models.