US gas prices surpassed $4/gallon for the first time in four years, driven by the Iran conflict and Strait of Hormuz disruption, sparking renewed EV interest. However, overall US EV sales fell 28% year-over-year in Q1 2026 after the $7,500 federal tax credit expired. Tesla delivered 358,023 vehicles, up 6% from a weak prior quarter but missing estimates by 7,600 units. Tesla's US EV market share rose to 54-58% not because it sold more, but because competitors like Ford (-70%) and Chevrolet (-55%) collapsed harder. Tesla raised prices significantly — Model 3 leases up 67% — while announcing a $25 billion capex plan that leaves it free-cash-flow negative. The gas price tailwind is real but insufficient to replace the lost federal incentive, and Tesla's challenges extend globally with steep sales declines in Europe and California.
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The gas price tailwindWhat is actually driving petrol pricesTesla’s market share is growing because the market is shrinkingThe pricing reversalThe real questionSort: