High Gas Prices Are Already Helping Hyundai Sell More EVs, CEO Says

Stubbornly high gas prices due to the war with Iran are moving the needle for some American car buyers, Hyundai's CEO claims.

Hyundai Ioniq 9 Roadtrip

Photo by: Suvrat Kothari

Tim Levin

By: Tim Levin

Apr 16, at 4:13pm ET

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Hyundai's U.S. EV sales grew by 40% between February and March, the company's CEO said.
José Muñoz, CEO of Hyundai Motor Company, attributed the gains to higher gas prices.
The Hyundai Ioniq 5 continues to be one of America's top-selling EVs, despite the market's downturn.

Stubbornly high gas prices have many people wondering: Could this trend reenergize a sluggish U.S. market for electric cars? Have EV sales boomed as a result? Not yet. But just over a month into the conflict with Iran, there are already signs that things are beginning to shift.

According to Hyundai Motor Company CEO José Muñoz, the automaker's U.S. EV sales jumped by 40% from February to March. He attributes the gains to higher prices at the pump.

"We have seen a significant change in the dynamic," he said in an interview with Bloomberg Television last week. "So definitely, when the American consumer sees an increase in fuel prices they try to move to solutions which are more friendly in terms of cost, especially in states like California."

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Hyundai sold more than 1,000 additional Ioniq 5 crossovers in March as opposed to February. The company's CEO says gas prices have something to do with it.

Photo by: Patrick George

In March, Hyundai Ioniq 5 sales rose by 27% to 4,425 units as compared with February. In the first quarter, it ranked as the No.2 best-selling non-Tesla EV, behind the Toyota bZ. Meanwhile, Ioniq 9 sales jumped by over 40%, from 505 vehicles in February to 905 the following month.

The average price for a gallon of regular gas crossed $4 at the end of March and has remained above that level ever since. Gas prices will likely stay elevated for months, even if the Strait of Hormuz reopens. Typically, the channel carries about a quarter of the world's oil supply, and the International Energy Agency has called the Iran war the "largest energy crisis we have ever faced."

Edmunds and other car-buying marketplaces have noticed an uptick in interest in electric options since the war started. Ingrid Malmgren, senior policy director at Plug In America, an EV advocacy organization, believes high gas prices will push more people into EVs, hybrids, and plug-in hybrids. In an interview, she highlighted a recent Pew survey which found that 32% of Americans were somewhat or very likely to consider an EV as their next vehicle.

"As they're seeing these gas prices and paying $100 to fill up their vehicle, it's a really strong driver," she said.

That being said, it's not clear that all of Hyundai's sales gains are attributable to gas prices. But Munoz clearly sees the current gas-price crisis as a key tailwind in the company's EV push.

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Any lift in EV sales would be welcome for a market that's reeling from the end of EV tax credits and other federal policies that were pushing cleaner cars. U.S.-wide EV sales fell by 27% in the first quarter, Cox Automotive estimates.

Hyundai has not pulled back from the electric market like some of its rivals, though it did recently cancel the slow-selling Ioniq 6 sedan and has leaned more into hybrids.

"We see the reality and the future differently" from some competitors, he said on stage at a CNBC event this week. He added that EVs won't reach the 50% or 60% market share in the U.S. that Hyundai once expected by the end of this decade, but that EV sales will still grow.

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"We're going to see probably something like 10 to 15, which is good enough to commit to this technology," he said.

Contact the author: Tim.Levin@InsideEVs.com

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