The latest inflation data from the Bureau of Labor Statistics brings ugly news for American drivers and households. Gasoline prices are up 34% over the last year, heating oil is up 74%, and diesel has climbed 70% just since August, all because of Donald Trump’s war in Iran.

That conflict shows no sign of ending. On Tuesday, Iran struck five different oil tankers in and around the Strait of Hormuz, adding more turmoil to an energy market already punishing consumers.

In most countries, the Trump oil shock has dramatically accelerated the transition to electric vehicles. According to the energy think tank Ember, fully electric cars represented 98% of new car sales in Norway, 80% in Denmark, and three quarters in Nepal during the latest reported year.

Fully electric vehicles accounted for more than half of sales in Iceland and Singapore, more than 40% in Sweden, Vietnam, the Netherlands, and Finland, and more than 30% in Luxembourg, Malta, Uruguay, and Belgium. In 11 additional countries, the share exceeded 20%.

China, by far the largest auto market, reached 38%, with sales rising quickly. Worldwide, fully electric models captured 21.4% of car sales, while plug in hybrids added another 8%, according to figures from August.

The United States is the glaring exception. Despite brutal gasoline and diesel prices, third quarter EV sales reached only 263,000, representing a meager 6.4% of new cars and about 100,000 fewer vehicles than in Q4 of 2024.

American companies are not leading the international surge either. Ford’s EV sales have fallen about 75% over the last year, GM’s have dropped 62%, and Tesla’s sales have remained flat.

Chinese automakers had faced serious trouble before the war. China’s weakening domestic economy hurt sales, while ultra cheap Chinese vehicles generated political backlash in countries with their own automobile industries.

BYD’s EV sales plunged from 646,000 in the final quarter of 2025 to 310,000 in Q1 of 2026. Geely Group’s sales similarly fell from 343,000 to 255,000 before the Trump oil shock abruptly transformed the market.

As EV demand surged, particularly across Asia, BYD and Geely Group restarted factories and expanded capacity. BYD raced past 762,000 sales this quarter, while Geely Group exceeded 410,000 and moved closer to Tesla.

Tesla remains the only major American company competing broadly in the global EV market, but its sales have been largely stagnant since 2023 at fewer than half a million vehicles per quarter. The momentum instead belongs to Chinese manufacturers that entered the crisis ready to expand.

The timing could hardly have been worse for Detroit. The Biden administration persuaded GM, Ford, and Stellantis to invest tens of billions of dollars in electric vehicles through production and purchase subsidies guaranteed for a decade, giving those companies time to make their investments pay off.

Just three years later, Trump signed legislation repealing most of those subsidies and further disrupted the companies’ business plans with his tariffs. A brief EV sales boom followed in late 2025 as buyers rushed to claim expiring tax credits, but the market quickly collapsed afterward.

American auto executives responded by retreating from their EV ambitions. GM recorded a $6 billion loss on its EV investments in early January, Ford canceled the F-150 Lightning and wrote down $19.5 billion in December, and Stellantis absorbed $26.5 billion in EV losses in late February.

Days later, Trump’s war in Iran made electric vehicles more attractive just after his policies had helped slash American EV production. The Big Three had little available for buyers and had never secured a meaningful position in the affordable portion of the market.

Analysts generally agree that eliminating the EV credit particularly damaged inexpensive, low margin models such as the Chevy Bolt. GM canceled that vehicle long before it could achieve the sales volume needed to justify its factory, while Chinese manufacturers rapidly captured more of the global market.

Demand in the used EV market has increased substantially since the war began. The discontinued F-150 Lightning is selling more than twice as quickly as the average used vehicle, even as its prices rise.

There are still scattered bright spots for American production. Hyundai continues operating its EV factory in Georgia, the Ioniq 5 is selling briskly, the Rivian R2 has achieved modest success, and Ford is developing a small electric truck expected to start below $30,000.

The choice is increasingly stark. Automakers can struggle through the work of building a viable EV business without government help, aside from oil wars, or keep selling large gas guzzling trucks and SUVs as Chinese competitors seize the industry’s future.