By Aishwarya Jain and Nathan Gomes
April 23 (Reuters) – Early signs of a shift toward electric vehicles have emerged for U.S. car rental companies as customers become wary of paying more at the pump due to the conflict in the Middle East.
At Hertz, which rents cars to Uber and Lyft drivers on a longer-term basis than traditional rentals, requests for EV reservations increased nearly 25% in March compared with February. The strongest uptick in demand for EV rentals has occurred on the West Coast, where gas prices tend to run highest, according to Doria Holbrook, executive vice president of Hertz’s mobility division.
At Turo, a peer-to-peer car-rental service similar to property-rental site Airbnb, EV bookings increased by 11% in the last three weeks of March compared with the prior three-week period. On March 31, the day U.S. gas prices eclipsed $4 per gallon for the first time since 2022, EV bookings on Turo were 47% higher than on the same day in 2025, the company said.
The Iran war has resulted in disruptions in the Strait of Hormuz along the Iranian coast, which is the passage for about 20% of the world’s oil and liquefied natural gas. Average gas prices in the U.S. have risen by more than a third since the war began on February 28, to $4.02 per gallon, according to the U.S. Energy Information Administration.
STRAIT OF HORMUZ DISRUPTIONS BITE
Surging fuel prices typically do not cause a sudden shift in car-buying decisions, analysts and dealers say. But the severity of this price shock already has led many consumers to seek alternatives. In Europe, for example, EV registrations across 15 countries leapt more than 50% in March.
The effect in the U.S. has been more muted. Sales of new EVs were down 25% in March from a year earlier, according to Cox Automotive, as the expiration of a $7,500 tax credit last autumn continues to dampen Americans’ appetite for electrics. But sales of used EVs are up sharply, and car renters appear more willing to make the switch in the short term to save on gas.
Car Rental Gateway, a digital rental platform, reported a 16% relative increase in EV and hybrid bookings in March. Rental companies that bet big on electric cars could benefit if gas prices stay high, said Hannes Põldvee, board member at Car Rental Gateway.
PRICES REBOUND IN USED EV MARKET
Sharper demand for EVs also has propped up the price of used electrics. John Coles, vice president of data science and analytics at ACV Auctions, an online platform used by dealers and rental firms to buy and sell used cars, said EV prices had declined for months but firmed up after the surge in oil prices starting in early March.
“We have seen EVs get a second lease on life due to the sustained pressure at the pump,” he said.
(Reporting by Nathan Gomes and Aishwarya Jain in Bengaluru; Editing by Mike Colias and Matthew Lewis)
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