Oil experts have recently debated how big of a crisis the Iran war could cause. However, even if the impacts to the U.S. auto industry turn out to be relatively short lived, they still could represent a wake-up call that even Automotive News’ editorial board can’t ignore.
“This conflict, like those before it, will test the industry’s ability to adapt — but unlike past disruptions, it arrives as automakers recalibrate their electric future,” Automotive News (2026) concluded. The unsigned editorial noted the irony that a war erupted only weeks after a handful of automakers announced the writing off of almost $50 billion in electric-vehicle investments.
Automotive News was ginger about acknowledging the 800-pound gorilla sitting in the middle of the living room — that some energy experts have warned that the Iran war could result in an oil crisis as big as in the 1970s (McIlroy, 2026). Instead, the editorial blandly stated that “it is imperative for industry leaders to prepare as best they can for whatever lies ahead.”
Then, in an apparent effort to say something positive, the editorial added: “If nothing else, the timing should help alleviate — and perhaps eliminate — some of the downward pricing pressure on EVs from 2023 coming off of their initial three-year leases in the coming months.”
Might automakers ‘reconsider’ EVs ?
The most intriguing part of the editorial was when it wondered “whether auto executives may reconsider their pullback from EVs, especially if consumers start asking for them to avoid continued pain at the pump.” This was a much more subdued take than that of The Electric Viking (2026) vlog, which flatly declared that by launching a war against Iran, President Trump had “become the greatest EV salesman in history.”
What Automotive News didn’t do was remind readers about how much pain U.S. automakers experienced during the 1970s oil crises. Nor did the editorial mention that Detroit had one big advantage when the second oil shock hit in 1979 — new CAFE standards that forced them to downsize their fleet of passenger cars. This time the industry will be entirely on its own due to an unprecedented flurry of deregulation by the Trump administration and a Republican-controlled Congress.
Also see ‘Will automakers address affordability crisis or hit gas pedal after deregulation’
One could write off this whole situation by arguing that the war hasn’t gone on that long and there hasn’t been lasting damage to oil-production capacity. For example, Christof Rühl of the Columbia University’s Center on Global Energy Policy recently suggested that “if the world would return to peace tomorrow, oil prices would mitigate again” (DW News, 2026).
Perhaps. It’s hard to tell which direction the war will go partly because of conflicting statements from the U.S., Israel and Iran. However, even if the crisis is only short lived, I would not be surprised if it spurred a longer-lasting sales rebound of lower-priced electric vehicles — and that gas-guzzling sport-utility vehicles fell in popularity due to an increasingly tough and unpredictable economy.
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RE:SOURCES
- Automotive News; 2026. “In our opinion: Global auto industry may end up a casualty of prolonged Iran war.” Unsigned editorial. Posted March 11.
- DW News; 2026. “International Energy Agency boss warns of historic energy shock.” Posted March 23.
- McIlroy, Tom; 2026. “Iran war energy crisis equal to 70s twin oil shocks and fallout from Ukraine war, says IEA chief.” The Guardian. Posted March 23.
- The Electric Viking; 2026. “Donald Trump is the Greatest EV Salesman in History — EV Sales are EXPLODING.” Posted March 22.
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What wake up call? The issue is the fickle public, not the dumb manufacturers. As long as it’s US policy to treat gasoline and diesel as perpetually available products with unlimited supply, the American public will buy inefficient new vehicles, which means all vehicles are inefficient. “The free market” will not support efficient new vehicles before they’re needed, and manufacturers can’t predict exactly when that will be. I think it’s inevitable, but being too early is the same as being wrong, and can kill you sooner rather than later.
Variations on this basic excuse has been trotted out every single time Detroit has found itself on the wrong side of market sentiment. The beauty of this narrative is that it can sound convincing, particularly given the lead times it takes to develop cars. Sure, the market can sometimes shift faster than automakers can react. But one problem with this excuse is that it completely ignores Detroit’s general tendency to make its cars bigger, glitzier and more powerful when left to its own devices. This is one of the most prominent characteristics of the U.S. auto industry, reaching all the way back to World War II.
Regarding the gas tax, I would be surprised to ever see a Republican president or Congress support increasing it in a meaningful way. That leaves the Democrats. Have you noticed that historically even they have shied away from doing so? Why do you think that’s the case? I would suggest that this is because hiking the gas tax comes as close as any policy I can think of to being the third rail of American politics.
Let’s draw up a scenario: If an incoming Democratic president in 2029 proposed increasing the gas tax, I suspect that the automakers and their allied associations would put great effort into trying to whip up frenzied public opposition. That would likely kill the proposal. But if it were still approved, demonizing the tax increase would become the centerpiece of Republican campaigns during the 2030 mid-term elections — and it would likely work like a charm.
To the extent that manufacturers are run by car guys, those guys aren’t fans of brodozers etc, or at least don’t think everyone should drive a ridiculous car or truck. It’s a business decision to feed a puppy what it wants to eat.
I agree that gas tax/efficiency standards are the third rail of American politics. A forward looking energy policy (assuming that petroleum fuel will tend to become more expensive, scarce, and unreliable) is a wedge issue that can be exploited. The business community is willing to support politicians who use that issue as a club in order to get other policies.
“I think it’s inevitable, but being too early is the same as being wrong, and can kill you sooner rather than later.”
Which is what happened when Detroit jumped on the EV bandwagon. The anticipated demand did not ramp up as quickly as did production. Detroit got bitten by the ’70s gas crisis because the Japanese had cars ready to go while the US was struggling with immature subcompacts and trying to decide if the situation would last long enough to warrant downsizing. This time they have the EV platforms in close proximity if the public decides to move that way. In fact, Toyota’s dependence on hybrids could work to take them down a few notches in USA sales. The American public isn’t likely to move away from trucks and SUVs though. It would take a prolonged war to do that.
This current middle east conflict will not cripple the oil market – it’s too resilient and decentralized. For instance, new exploration leases are opening up as I write this. For now, I doubt that the war will have an effect on the U.S. car market.
Considering our mass market, hybrids are the way to go, the bridge between the inexplicable demand for large gas guzzlers and the inevitable adoption of all-electric ho-hum vehicles. Methinks that we are about 20 years off from full adoption of the latter. By then I may be dead, so I won’t have to own an EV, and my children will be selling my Mustang V-8.