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.
Most states, including California, directly collect highway tax on registered electric vehicles.
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.
Ford, Stellantis, and GM are multi national producers of vehicles. Each one offers vehicles in the European marketplace where gasoline is over $7 per gallon. Rather than resurrecting discontinued models, a better start might be to modify European models for the North American regulations and market.
There are complaints about the high cost of gasoline. Here in NJ, gas prices were at $2.70 a few weeks ago. Today, I filled up at $3.09 per gallon. I remember as child my father’s shock in 1973 when gas rose from .32 per gallon to .54 per gallon. Adjusted for inflation, that .54 is now $3.96 per gallon. I also remember gas staying at .54 per gallon until about 1979 or 1980 when it flirted with $1. In today’s dollars that .54 gas in 1978 would be $2.69 per gallon.
Where I’m going with this is that US gas prices have been mostly stable and ridiculously low when compared with the rest of the developed world. The music could be about to stop and the US automakers need to recognize that. ….and building 4 ton electric F-150’s and Suburbans is not a sustainable strategy. Fuel efficiency and reasonably sized electrics and hybrids is.
It’s dumb to expect that automakers will keep fuel efficient vehicles that don’t sell in production.
It’s dumb until it’s not. I would not be surprised if the Asian automakers who have been slower to get rid of fuel-efficient cars manage to navigate the next year much more gracefully than U.S. automakers.
Offering a reasonably broad lineup is like an insurance policy — you never know when it could save your butt. And, let’s be real — the potential for gas prices to rise is ever-present.
Here I agree that the US makers obsession with trucks and SUVs is short sighted. Yes, those are the market segments with the big sales and able to keep the production plants at high volumes. But, at some point there will be a market switch and these companies have failed to diversify their offerings.
Toyota still sells a ton of Camrys and Corollas every year. Honda Accord and Civic also post big numbers. There remains a market out there.
I’m in favor of efficient vehicles. I think thAt Silverados and F150s are stupid personal vehicles. The current federal non-policy that indulges the American instinct to drive enormous personal vehicles is an economic dead end. And it’s dumb to think that auto manufacturers will keep more economical vehicles that don’t sell in production indefinitely until the inevitable comet randomly strikes and makes the environment uninhabitable for the dinosaurs.
The story of Detroit’s decline significantly reflects its repeated misjudging of the market by going full bore on bigger, glitzier and more powerful vehicles. The imports first made inroads in the late-50s because of U.S. automakers’ fixation with tailfinned mansions of glory. Then foreign automakers came back even stronger in the late-60s after Detroit’s compacts got increasingly bigger. And then in the 1970s, each of the oil crises allowed imports to take an even bigger chunk of the market — in no small part because Detroit offered a few shitboxes but emphasized increasingly bloated bigger cars.
The kindest reading of history is that Detroit was blindsided by major pivots in the political economy because of the long-lead times needed to develop new cars. There’s some truth to that, but as early as 1955 imported sales started to pick up — and only American Motors paid much attention to it. By the same token, by 1966 import sales were starting to revive but Detroit largely ignored that until the 1970 model year.
So would it have been “dumb” for more U.S. automakers to have made at least a half-hearted response to the imports in, say, 1957-58? Or 1967-69? I would suggest not.
Now, one could argue that the oil crises were harder to predict. In a sense that was true, but David Halberstam wrote about how at least some folks in the U.S. auto industry recognized that domestic automakers were at risk of being too dependent on big cars if an obviously unstable Middle East experienced a political crisis. What ended up happening was quite the opposite of a random comet.
I clearly remember both Energy Crisis of the 1970s and what happened during it and then the following period.
Gas prices spiked. Smaller more efficient cars sold as people abandoned (or parked) their large cars. In each case it was more about gas shortages than the price spike. Remember sitting in line waiting to get to the pump. Some gas station rationed the maximum amount of gallons one could purchase at a time.
But it wasn’t that long afterwards when gas was readily available again that people reverted to the larger cars; some downsized large but still fairly large. The reduction in size and smaller engines was a longer decline and not a “falling off a cliff” moment. One might make an argument that it was less the price of gas but the long recession with particularly high interest rates that is the root of the change.
My sense is that the current war in the Middle East is way too soon to determine if it leads to real changes in the marketplace. A few weeks or even 2 months of conflict, as long as the American supply of gas remains steady = no real changes. A prolonged war AND constrained supply then maybe. Yet, the US is not likely to have any restriction of supply since we are an ample producer along with Canada, Mexico and now Venezuela’s imports. Who will be impacted more directly are those areas that depend upon ME oil coming through the Strait of Hormuz.
In the US who will be affected will be those that are just barely able to make their payments on the large trucks and SUVs with a possibility of a recession that would creep upwards to affect more of those lower end stretched buyers.
As for GM having European brands to rely upon as a source for available platforms – that was sold off and is now part of Stellantis.
Maybe that is Stellantis’ next chapter in the US…
The fuel efficient and versatile K platform saved the Chrysler Corporation’s bacon once.
Unfortunately, Stellantis seems to be more interested in making easy US profits that then get transferred to prop up their European mess. Mostly starve the US operations of new product development funding.
Yeah, 45 years ago. Stellantis does have Opel so they have that option. However I don’t know how eager dealers would be to take on an import after the FIAT Alfa debacle. Anyway, the totally optional war could end and everything goes back to normal in a matter of weeks, or it could go on for hyears. Honestly, even if the war ends tomorrow and the Straits of Hormuz are opened I fear this sort of turmoil will be the new normal for decades. It would be a good idea to keep high MPV and electrics in the product mix. However you can’t increase production like tjrning on a faucet.
The US market faces a formidable challenge. Large vehicles need larger engines, not overly complex turbo charged 4 and 6 cylinder engines that seemingly self destruct after the 50000 mile mark. However, large vehicles fail to meet fuel economy standards and are severely penalized. Electric vehicles are too expensive and have limited towing capacity.
Why do urban and suburban drivers need pickups and SUVs. They are inefficient as commuter vehicles. There are very few right sized vehicles available today. The Toyota Corolla, the Tesla Model 3, the Toyota Prius, the Mazda 3 but after that the pickings are slim.
Today is Wednesday, 03/11/2026: The average price of a gallon of 87-octane “regular’ in Indianapolis, has risen from $ 2.73 to $ 3.59. The migration of Detroit to full-size six-passenger trucks has played into the hands of higher gasoline consumption and oversized vehicles, in my opinion. Dinah Shore and “See the U.S.A. in your Chevrolet” was for a 1953 Bel Air sedan, not a six-passenger loaded Silverado with every option known to mankind.
GM and especially Ford will not give up their trucks and SUV’s without a Herculean fight.
IT is obvious to anyone that without the big vehicles – the companies will not be here.Ford and Gm have found their golden goose and esp GM has made an artform out of it along with GMC.
The companies cannot make money effeciently without the large trucks as opposed to a 50/50 balance of cars and trucks. Remember in the early 1970’s GM with nearly 60% of the market found it hard to to make money. That really happenend.
Small cars with thier small profits have been outsourced to the rest of the world. Let them deal with the ”chasing after volume” or $10 profit per car – so the thinking goes.
Even Henry Ford II groused about small cars = small profits – and gave Iacocca carte blanche to develop ever larger and more expensive cars.
What is the corrolary to this situation ? Or will Americans have to go thru a 1970’s style downsize ? Again.
GM made money every year in the 1970s. Typically 2 to 3 billion dollars on sales of 20 to 30 billion. One year, GM made about 1 billion.
Which brings us back to the key question: Why did GM experience one of the biggest industrial collapses of the last century?
GM couldn’t service its traditional customers and younger customers with the same products. The unnecessary multiple brands became a weight as volume fell. Inadequate attention to reliability was a concrete reason to validate attraction to import brands. Import brands had the benefit of applying their knowledge and resources across multiple markets while GM’s US market products weren’t salable or adaptable elsewhere.
GM spent too much on the 1985/1986 C/H and E and 1988 W platforms as well as Saturn at the same time the market was quickly moving towards trucks and SUV’s, leading to its near bankruptcy in 1992.
I am no expert here – but the Union system was akin to a protection racket. The healthcare costs for retiring workers was overwhelming along with generous pensions. The company was no longer in a position to be so gererous. The way outdated divisional system and in GM’s case the monumental redundancy of models vastly hurt GM at the dealer floor level.
This story is as old as Methusela. American car companies get bit in the backside every time gas prices go up, which they periodically always do. And yet, they keep producing more gigantic SUVs and trucks. These beasts need to be scaled back down in size, and more fiel efficient cars made. Maybe have government intervention to limit size and number of trucks/SUVs each manufacturer are allowed to offer. If GM, Ford, and Stellantis can’t compete, so be it. Just because Americans think they should drive giant vehicles doesn’t mean they should be allowed to do so.
Jonathan, what little libertarian in me kicks in here. The big pickup/SUV drivers are being kicked in the backside now. The ideal solution would have been to kick up gas taxes when the prices were at historic lows like a month ago. There was no political appetite for it then and I see none in the future. A gas guzzler tax perhaps rather then rationing SUVs would I think be more workable.
Limiting production would work financially for us automakers. Reduced supply equals higher price.
So – instead of the old quote “What America needs is a good 5 cent cigar” it’s now – What America needs is a good 50 mpg car (or truck – or Hummer).
I vividly remember both oil embargoes and it gave me a distaste for full-size cars that never really left. I didn’t leave GM and Ford, they left me.
I own a Mazda CX-30 which averages 28 mpg in 50/50 and is fun to drive. It’s big enough for me.
Well, now it’s difficult for me to shop for a car darned near ANYwhere it seems. l’m very much trying to avoid turbos – especially if attached to 3 cylinder engines. There seems to be few naturally aspirated models to chose from.
So – GM is leaving me too, and Ford has been out of my picture for a considerable time. What used to be Chrysler is a laugh.
Now I’m seriously thinking of buying a very low mileage 2 or 3 year old example of something that I admire rather than wait until the vehicles that aren’t scary are too hard to find.
All full sized cars were not distasteful gas guzzlers. You missed some enjoyable ones, unfortunately. l enjoyed my Impala and MonteCarlo (the Monte especially) from 20 years ago with the 3.5 OHV V6. l drove the Impala to the opening of the new Studebaker National Museum in South Bend in 2005 and got 32 U.S. mpg on the 800 mile round trip – all highway driving. You just had to be careful picking the right model/platform and engine. l recently have to drive a friend’s Corolla on occasion. It’s reliable and frugal and l respect it – but l don’t enjoy it.
I for one am very puzzled by the bad reaction to gas prices attributed to the Iran conflict. If you own a Chevy big truck or a Ford expidition just looking at it betrays its thirst for gasoline.
Everyone know – gas goes up and gas goes down. The prices dont remain the same . Another example is a large home full of modern conveniences. Takes energy dont they?
All I am saying is that if you buy one of the above you cant honestly quibble about modestly higher running costs.
Surprize – gas today is cheaper than what is was years ago. When I had a 2005 Ford Thunderbird premium fuel required by that hunk of junk was about $3.25 – 3.40 a gallon. In todays money that about 6 or 7 dollars a gallon.