By Eric Peters
Eric Peters Autos
May 6, 2026
Gas prices aren't quite yet as high as they were back in 2008 - which was just before GM went bankrupt and Ford nearly did, too. But what happens when they do get there?
Well, probably what happened back in '08 - again.
GM and Ford are more dependent now than they were back then on the on the profits earned via the sale of trucks and SUVs, especially the big ones. Because they hardly sell anything else. Back in '08, GM and Ford still sold a fair number of cars - including models low and middle income people could afford, such as the Cobalt and Impala (GM) and the Focus and Taurus (Ford) as well as affordable, compact-sized trucks, such as the old Ranger (Ford) and S-10 (GM). Those are all gone now, leaving fleets of crossovers and trucks and SUVs to sell.
The profit margin on a Cadillac Escalade is north of $20,000 per sale. It is easy to understand why there's so much money in the sale of an Escalade when you understand that an Escalade - which has a base price of $91,100 - is essentially a rebadged, reskinned and luxed-up Chevy Tahoe, which has a base price of $60,700. Do you think there's $30k of "added value" in the Escalade?
There's also a lot of profit-per-sale in the Tahoe, which is a basically simple vehicle as far as new vehicles go. It has a lot of electronica, it's true. But behind the glowing touchscreen there's just a Tahoe - which is just a body-on-frame SUV with a relatively simple (pushrod, two-valve) V8 engine. To get some sense of this - of how much money there is in this - the 2021 Tahoe's base price was $48,000 and there is very little meaningful difference between a 2021 Tahoe and a 2026 Tahoe. For that matter, between a 2026 Tahoe and and a 2016 Tahoe that listed for $37,280. Yes, inflation. There is that. But it also more than just that. These big SUVs and trucks are - literally - where the money (profit) is.
Not just for GM and Ford, either. The profitability of Stellantis depends on the profitability of Ram trucks and Jeep SUVs. If those falter, Stellantis is likely to fall.
How close are we to a fall?
Well, as of early May, it costs about $100 to fill up a full-size SUV or truck's tank. Some of these want premium gas - which costs more than $5 nationally in most areas (as of the first week of May, 2026) which would mean about $115 for a tankful. Some of these models - including the Escalade - offer diesel engines as an option and it's likely not many buyers are selecting that option anymore given diesel already costs about $6 per gallon on average ($140 per tank) and there's very little mileage advantage. People buy the diesel chiefly because it's better suited for towing than the gas V8.
It's important to pause and remember that the cost of gas (and diesel) affects the cost of pretty much everything else, too. So there's a compounding effect. It is harder to afford a $100 tank of gas when a basket of groceries also costs $100 and then there's the (natural) gas bill and the electric bill, which are also going up in tandem.
Let's wonder aloud what it will be like if gas cost rise to $6 or $7 per gallon. That will probably be the breaking point, which is the point at which the cost is no longer merely expensive but unpayable. Keep in mind that the typical buyer - and owner - of a big truck or SUV (excepting the luxury-badged models such as the Escalade and its Ford analog, the Expedition-based Navigator) is not a one percenter. He is a reasonably successful middle/upper-middle-class dude. Many such buy these big trucks and SUVs as dual-purpose vehicles; i.e., they use them for work but they also use them to cart around their families. You see these big trucks and SUVs parked in suburban driveways all over America.
How long before they are actually parked ? How long before they are dumped by owners who can no longer afford to fuel them ? What happens to the dealerships that can no longer sell these things except at a loss ? Well, the same thing that happened last time. As the inventory begins to pile up, the pressure will build to offload the inventory, even if it means absorbing heavy losses. It will be worse this time, though, because GM and Ford (and Dodge and Chrysler) have very little else to sell people who need a vehicle that doesn't cost $60k to buy and $120 to fuel.
After six months of that - of nothing selling or "selling" at a huge loss - and GM and Ford and Stellantis are going to be in big trouble.
But then, so will we all.
This article was originally published on Eric Peters Autos.