The U.S. electric vehicle market is in a rather contradictory stage: technology continues to advance and model choices are becoming increasingly abundant, but sales data show completely different polar trends. On the one hand, the sales of second-hand electric vehicles are close to historical highs; on the other hand, the sales of new electric vehicles have declined significantly.
According to the latest analysis of the U.S. auto market in the first quarter of 2026 by the automotive industry research organization Cox Automotive, a total of about 93,500 used electric vehicles were sold in the first quarter of this year, an increase of 12% from 83,587 units in the first quarter of 2025, and an increase of 17% from the fourth quarter of 2025. By comparison, U.S. new electric vehicle sales in the first quarter of 2026 were approximately 212,600 units, a sharp 28% decrease from the 296,304 units sold in the first quarter of 2025. This set of data is seen as an important signal of the impact on the industry after the end of the U.S. federal electric vehicle tax credit policy.
The factors causing this and other changes are quite complex. The most direct one is the cancellation of the US$7,500 federal electric vehicle purchase tax credit, which has caused a sharp increase in the cost of purchasing new cars. At the same time, electric vehicles generally depreciate faster than fuel vehicles. For example, the Toyota bZ4X, considered relatively affordable, has lost about 29 percent of its $42,000 sticker price since its launch, according to a new study. The weak value retention of new cars puts pressure on new car sales, but in turn makes used electric cars more attractive in terms of price.
Data from Cox Automotive also shows that in February 2026, about 44% of used electric vehicles in the United States were sold for less than $25,000. Currently on the second-hand market, the average electric vehicle purchased for $20,000 to $30,000 is a 2022 model with a mileage of about 33,000 miles; while a second-hand fuel vehicle at the same price is, on average, one year older and has a mileage of nearly 50,000 miles. This means that with the same budget, consumers can often buy second-hand electric vehicles that are more recent and have less mileage.
There is also a structural factor driving the surge in the supply of second-hand electric vehicles: the concentrated return of rental vehicles. Mark Strand, deputy chief economist at Cox Automotive, pointed out that between 2023 and 2025, a large number of electric vehicles will flow into the market as leases, driven by the so-called "lease loophole" in the Inflation Reduction Act (IRA). As lease terms expire, these vehicles are being returned to dealer inventory. Cox predicts that within the next year, the number of leased vehicles returned upon expiry each month will gradually climb to 240,000, of which about 20%, or 50,000, will be electric vehicles, which will further enrich the supply of second-hand electric vehicles.
In terms of price, the gap between second-hand electric vehicles and fuel vehicles of the same level is also rapidly narrowing. According to Cox statistics, the current average selling price of second-hand electric vehicles is close to that of similar fuel vehicles, with a difference of only about US$1,300. With overall new car prices continuing to rise and gasoline prices rising, this gap no longer represents a decisive barrier for many families.
Loren McDonald, CEO and chief analyst of Chargeonomics, an electric vehicle charging solution company, believes that in the current high-price environment, consumption tendencies tend to be conservative. Those families who live in the suburbs and own two or three cars. If they have been considering buying an electric vehicle but are unwilling to pay the price of a new car of US$50,000 to US$60,000, they are likely to turn to a model such as a three-year-old second-hand Tesla that only costs US$20,000 to US$30,000. This consumption mentality is diverting some of the original potential demand for new cars to the second-hand market.
As technology continues to mature and vehicle models become more diverse, the U.S. electric vehicle market is likely to be in a "best cost-effective window period." From a historical perspective, the present may be a rare opportunity to purchase second-hand electric vehicles in the history of electric vehicle development. If you have been planning to get into an electric car but are concerned about your budget, then looking for an electric car in good condition in the second-hand car market at this time may be easier than ever to get a good value for money.