As I write this, Automotive News has not yet posted a full news story on how a protracted war in Iran could impact U.S. car sales. The industry’s leading trade journal has only parenthetically made reference to the conflict as part of an article about the challenges the VW Group faces (Boston, 2026) and another one that mostly focuses on Middle East auto sales (Greimel, 2026).
However, The Detroit News says there is the potential for a “very large impact” — particularly for domestic automakers because of their heavy reliance on “gas-guzzling trucks and SUVs” (Ramseth and Noble, 2026).
Ashby Lincoln (2026) of CBT News noted that in the past consumers have responded quickly to rising fuel costs. “When gas exceeded $4 a gallon in 2008, Americans shifted away from large trucks and SUVs, benefiting foreign manufacturers with smaller, more efficient vehicles. Analysts say even a modest shift in demand could create challenges for Detroit automakers that cannot quickly adjust production.”
CBS News reported this afternoon that the “average national cost of gas is now $3.48 per gallon, up 48 cents since last week and 58 cents from a month ago, according to data from AAA. That remains considerably lower than during the pandemic, when a disruption in oil supplies pushed the cost of regular gas up to $5.02” (Cunningham, Cerullo; 2026).
That said, even if the conflict subsided quickly and oil production and distribution resumed, gas prices in the U.S. could stay elevated until the fall, according to David Kelly, chief global strategist at J.P. Morgan Asset Management (Cunningham, Cerullo; 2026).
Might Detroit rediscover fuel-efficient cars?
The great irony of the Iran war is that it is happening just as U.S. automakers are starting to take advantage of a recent rollback in regulations that allow the comeback of gas-guzzling vehicles. For example, Stellantis head Antonio Filosa reportedly stated last month that reviving the Hemi V8 engine is part of ensuring that the “customer is back at the center of our business strategy” (Gardner, 2026).
Filosa’s comment apparently reflected the viewpoint that climate change regulations had become more stringent than what the marketplace supported. However, what if higher gas prices lead to customers demanding more fuel-efficient vehicles — and Stellantis is going in the wrong direction?
See also ‘Will automakers address affordability crisis or hit gas pedal after deregulation?’
By the same token, will the writing off of almost $50 billion invested in electric vehicles prove to be premature if more consumers turn to them in response to a gas-price spike caused by the Iran war (VanHulle, 2026)?
Peter DeLorenzo (2026) argues that the “’pendulum’ is about to take a giant, decisive swing back.” That’s one plausible scenario. However, even if the conflict has only a small short-term impact, I think this is a wake-up call that U.S. automakers should offer more well-balanced lineups rather than going whole hog on gas guzzlers. Will they? Given Detroit’s long-standing fixation with bigger, glitzier, more powerful vehicles, I doubt it.
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RE:SOURCES
- Boston, William; 2026. “VW Group’s recovery hinges on China push, new EVs, restructuring as Mideast crisis adds uncertainty.” Automotive News. Posted March 9.
- Cunningham, Mary and Megan Cerullo; 2026. “Gas prices surge as oil spikes amid Iran war. Here’s how much Americans are paying.” CBS News. Updated March 9 at 5:14 EDT.
- DeLorenzo, Peter; 2026. “Hello, Pendulum.” Auto Extremist. Posted March 8.
- Gardner, Omari; 2026. “Daily 5 report for Feb. 19: When buyers ask, ‘That thing got a Hemi?’ Stellantis can once again say, ‘Yes!’” Automotive News. Posted Feb. 19.
- Greimel, Hans; 2026. “Toyota, Hyundai, Chery, Stellantis face big disruptions from Iran war, Bernstein analysis shows.” Automotive News. Posted March. 6.
- Lincoln, Ashby; 2026. “Iran conflict threatens U.S. auto sales as oil prices surge.” CBT News. Posted March 5.
- Ramseth, Luke and Breana Noble; 2026. “Detroit automakers face these potential problems if Iran war drags on.” The Detroit News. Posted March 4.
- VanHulle, Lindsey; 2026. “Automakers regroup as market shifts after $50 billion EV debacle.” Automotive News. Posted Feb. 13.
Gas prices here are in the $2.40 to $2.50 range. I suspect that those higher prices are due to states pushing EVs then needing to boost gas taxes to make up for lost revenue. If EV use increases then utility prices will go up. You can’t escape higher costs, there needs to be balance.
We went through this in the 1970s and consumers may move to more efficient cars but they’ll move back after prices settle down or they become accustomed to higher prices. We have already transitioned to turbo four cylinders from V8s and there isn’t a lot to be gained there for most buyers. What’s need is to bring down size, and therefore weight. Some cars attained 40mpg back in the Seventies and safety regulations pushed the weight up to the point that mpg went down. You can’t have it all.
I would welcome people abandoning their trucks. I drive a car and can’t see around them. They handle poorly and driver education is inadequate which makes them a danger to me. But ultimately, any change will be temporary. Ford and Chrysler are currently ill-equipped to handle a change in consumer preferences but it will happen slowly enough that they’ll be able to catch up in two or three years. Hopefully the 70s Japanese Invasion made it clear that they can’t drag their feet and hopefully they’ll pay more attention to their assets in Europe and bring those lessons to the USA.
Don, you might be interested in taking a look at AAA’s tracking of gas prices by state (go here). It offers a national average but you can also see which states have the highest prices. It’s true that states with climate regulations have higher taxes, but AAA points to other factors in the national average increase — including the conflict in the Middle East (go here).
I hope you are right that U.S. automakers will pull back from their dependence on gas-guzzling vehicles. Their recent behavior suggests that they have forgotten their hard-won experience in the 1970s.
In 1958, after a 3 year absence, AMC brought back what was essentially a ’55 Rambler and named the subsequent car the “American”. It sold well and contributed to the transportation needs of the populace, especially during the sharp recession of late ’57 and into ’58.
What do companies do with recently cancelled platforms? Could Ford resurrect the Escape? Or Chrysler the 200 and Dodge Dart? And Chevy the Malibu? l would imagine, of course, that the platform would these days have to be able to comply with contemporary safety laws, but do the companies immediately destroy the old cancelled platform tooling in the name of liability or something – or is it kept for a while in case it may be modified and become reusable? l don’t know.