More car buyers are shifting to EVs — but the reasons why are nuanced

U.S. consumers traded gas-powered vehicles for electric vehicles (EVs) at a higher rate in April, with 72.1% of new EV buyers trading in a gas car, up from 67.1% in January, according to Edmunds data shared with CNBC. EV loyalty also increased, as 35.4% of buyers traded in an older EV for a new one in April, up from 26.2% in January, while 44.5% traded for a used EV, up from 34.3%. Analysts suggest rising fuel prices—up roughly 44% year-over-year—are driving the shift, though high interest rates and vehicle costs limit broader adoption. The average EV transaction price in March was $49,275, according to Cox Automotive, and consumers remain hesitant to trade in functional gas cars for expensive new EVs amid elevated borrowing costs. Federal incentives for EVs expired, and automakers have pivoted toward internal combustion and hybrid vehicles, complicating the market. Edmunds Senior Director Ivan Drury noted that sustained high gas prices—linked to geopolitical tensions like the U.S.-Israel strike on Iran—could further push EV adoption, but demand remains tied to dealership incentives like low APRs and cashback offers. The used EV market has seen a surge due to defunct federal credit rules, which required U.S.-made EVs to qualify for up to $7,500 in incentives unless leased. These cars are now entering the used market at lower prices, while European countries show higher EV interest due to steeper gas price increases and a wider selection of affordable EVs, including Chinese models. Drury cautioned that the shift may not be permanent, as past gas price spikes (like in 2008) led to mass vehicle upgrades that haven’t repeated. For now, EVs remain a niche but growing segment, with demand influenced by economic conditions rather than a wholesale rejection of gas-powered cars.