Tesla delivered 358,023 vehicles globally in the first quarter of 2026, a modest increase from the 336,681 sold during the same period last year. The growth comes despite the elimination of federal tax credits that previously shaved up to $7,500 off EV purchase prices. The company's performance signals that soaring gasoline prices—exceeding $4 per gallon—may be prompting more consumers to consider electric vehicles.

Electric vehicle sales had plunged by more than a third after Congress eliminated the tax credit at the end of September. Auto executives caution that sustained high fuel prices typically take months to shift consumer behavior. However, Hyundai reported a 13 percent increase in sales of its electric Ioniq 5 in March, while Kia saw electric model sales jump 30 percent in the first quarter. General Motors' Cadillac division recorded a 20 percent increase in electric vehicle sales, contrasting sharply with the company's overall 10 percent sales decline.

Higher gas prices appear to be boosting interest in both electric and hybrid vehicles. Car shopping sites report significant increases in consumer research of EVs since the war with Iran began on Feb. 28. Used electric vehicle sales surged 29 percent in January and February, suggesting many consumers are ready to make the switch if they can afford it. As technology improves and prices fall, many auto executives believe electric vehicles will eventually displace gasoline-powered cars.