By Ben Prochazka, Executive Director
Following the start of the war in Iran, the Iranian regime responded aggressively by targeting military bases and oil assets in the region and effectively closing the Strait of Hormuz, a key chokepoint through which more than 20% of the world’s oil flows. As a result, natural gas and crude oil prices have spiked. Once again, our dependence on oil for transportation has provided our adversaries with significant leverage; though Iran cannot respond with equal military might, oil dependence provides it with a direct line of attack against every American citizen’s wallet.
The dangers of oil dependence are not new. In 1973, following U.S. military support for an Israeli war, Arab members of the Organization of the Petroleum Exporting Countries (OPEC) cut off oil exports to the United States, weakening the U.S. economy by causing oil prices to skyrocket. We learned our lesson—for a time. Alternative fuel vehicles and vehicle efficiency standards emerged from our national realization that an economy dependent on oil is fundamentally vulnerable to the whims of oil-producing nations that share neither our interests nor our values. For decades, Democratic and Republican administrations alike acted to reduce our dependence on oil, instituting fuel economy standards while investing in alternative fuel vehicles that could eventually end our reliance on oil for transportation.
After decades of development, electric vehicles (EVs) have finally proven they can compete with gas-powered vehicles on cost, convenience, and capability. More than seven million EVs now populate American roads, supported by incentives to mitigate upfront price premiums and grant programs to support charging infrastructure deployment. Since 2019, American EVs have traveled over 192 billion miles and displaced nearly 400 million barrels of oil, according to an Electrification Coalition analysis. But over the past year, the United States has unwound decades of policy that had been successfully chipping away at this long-term risk, increasing and prolonging this strategic vulnerability.
Failing to support the policies and actions needed for the American EV industry to succeed also creates a new risk: that the United States will fall behind in the global transition to electric transportation, sacrificing market share and leading to new resource vulnerabilities in the decades to come. The global automotive market is electrifying rapidly, with EVs accounting for approximately one in four new vehicle sales in 2025. While transportation electrification faces challenging headwinds in the United States, it continues to be mostly a question of when, not if.
The United States has benefited significantly from its position as a global automotive leader; the sector supports approximately 10 million American jobs and anchors the domestic manufacturing base. Failing to keep pace as the world transitions to next-generation vehicles would cause the American automotive sector to slide into obsolescence, weaken domestic manufacturing capacity, slow economic growth, and lead to a dependence on foreign critical mineral supply chains, which have emerged as the 21st century’s equivalent to oil—a strategic commodity used as an input in countless advanced technologies. Without steady supplies, our military would be unable to produce many of its most essential weapons and defense systems, and large portions of the economy could grind to a halt. But unlike oil, critical minerals can be recycled, creating a circular supply chain. By investing in its EV industry, the United States and its allies could develop the mining, processing, and recycling capacity to secure independence from China, which currently dominates global critical mineral supply chains and has proven willing to leverage those resources to extract concessions from the United States.
Fuel economy standards and EV tax credits successfully jump-started a U.S. EV industry capable of competing with China’s, but recent decisions to terminate these programs have jeopardized hundreds of billions of dollars of committed investments, disincentivizing companies from investing in the United States and effectively handing China control over the future of transportation.
There is no substitute for a coherent suite of federal EV policies. As Congress considers the upcoming highway bill, it should prioritize transportation electrification. States and municipalities can also leverage a wealth of proven policies, programs, and business strategies to maintain momentum behind transportation electrification.
The current war in Iran demonstrates, once again, the fragile nature of being so reliant on one fuel for transportation. Diversifying how we power transportation mitigates the risks of oil markets and international conflicts while ensuring that the U.S. auto industry remains globally competitive. By tapping into our domestic, diverse grid, we can inspire American technological innovation, but now is the time for Congress to act.