Why Higher Oil Prices Are No Longer Giving Tesla Stock a Boost

Tesla stock was down early Thursday, while oil prices rose again, following Iran's rejection of America's conditions to end the war.

That's a little odd. In the past, Tesla's stock got a boost from higher oil prices.

Shares of the electric-vehicle maker were down 1.3% in premarket trading at $381.11, while S&P 500 and Dow Jones Industrial Average futures were down 0.6% and 0.5%, respectively.

Coming into Thursday trading, shares were down 14% this year and up 34% over the past 12 months. Shares were also down about 4% since the start of fighting in Iran, similar to the S&P 500's decline, despite higher oil prices that, in the past, have prompted more car buyers to consider EVs.

All things being equal, electricity from a home is cheaper than gas from a pump. A Tesla Model Y might take about $10 of electricity -- delivered from someone's home -- to drive 250 miles. That might be $30 of gasoline for a similar car at current prices.

Despite the conflict, which has roiled the energy markets with the Hormuz Strait closed, gasoline prices are down about 25% since peaks reached in 2022. Retail electricity prices are up about 30% over the same span. Back then, the EV versus gasoline gap might have been closer to $30 to drive 250 miles, rather than today's $20 gap.

The outlook for EV sales growth in 2022 was also much better. Americans bought 1.2 million all-electric cars in 2023, up from about 813,000 in 2023. Tesla's U.S. sales jumped to 655,000 in 2023, up from 522,000 in 2022.

In 2025, Americans bought 1.3 million all-electric cars, roughly flat with 2024, and up only slightly from 2023. Tesla's U.S. sales in 2025 were about 589,000, down about 7% from 2024.

Americans, for now, are buying all the EVs they want, no matter what gasoline prices are. The sales outlook for 2026 is particularly weak. Americans lost the $7,500 EV purchase tax credit in September. Fourth-quarter EV sales plunged 36% year over year.

Tesla stock has also decoupled from gasoline prices because investors are focused more on AI-related opportunities, including robo-taxis and robots. Tesla launched a robo-taxi service in Austin, Texas, in June and plans to expand to more cities in 2026. Tesla also plans to unveil the third generation of its humanoid robot, Optimus, in the coming weeks.