Strange times in the electric vehicle (EV) world at the moment. While the technology behind electric cars continues to gather momentum, the sales numbers are showing mixed results. On one hand used EV sales are nearing record growth, but new EV sales are actually in decline.
This is per a study by Cox Automotive, which focuses on the US automotive landscape for the first quarter of 2026. It is perhaps the biggest hint of how ending the federal tax credit is shaping the EV industry in the US.
The study shows that a total of 93,500 used EVs were sold in Q1 of 2026. That’s up 12% from 83,587 units in Q1 of 2025 and up 17% from Q4 of 2025. By contrast, new EV sales in America were around 212,600 units for Q1 of 2026. That’s a mammoth 28% decline from 296,304 in Q1 2025.
There are plenty of reasons why this might be the case. First of all, there’s the obvious: the discontinued US$7,500 federal EV tax credit. Then, there’s the fact that EVs depreciate way faster than ICE cars. For instance, the Toyota bZ4X EV, one of the more affordable EVs out there, lost a staggering 29% of its $42,000 value since its release, according to a recent study.
That does not bode well for new EV sales, but it actually helps used EV sales numbers. Cox says around 44% of used EV sales in February this year came in under $25,000.
An average used EV being bought today, between $20,000 and $30,000, is a 2022 model that has about 33,000 miles on average, according to Recurrent. For the same price range, used ICE cars on average are a year older and have almost 50,000 miles on the odometer.
Lease returns are one particular factor that is pushing the numbers for used EVs, says Mark Strand, Deputy Chief Economist at Cox. Apparently, dealer lots are now beginning to receive the surge of EVs leased via the Inflation Reduction Act’s (IRA) alleged "leasing loophole" between 2023 and 2025. According to Cox, the monthly number of lease returns will gradually increase to 240,000 over the coming year, with about 50,000 cars (20%) being electric.
Plus, the prices of used EVs are now coming within $1,300 of equivalent ICE cars. Couple these factors with rising prices for new cars and the rising cost of gas of late, and the reasons practically reveal themselves.
"With rising prices for everything and consumers less likely to spend, a lot of people who are two- or three-car households in the suburbs who have been thinking of getting an EV and don’t want to spend $50,000 or $60,000, maybe they’ll spend $20,000 or $30,000 on a three-year-old Tesla,” said Loren McDonald, CEO and chief analyst at the EV charging firm Chargeonomics.
We might just be looking at the greatest purchasing opportunity in the history of electric automobiles. So if you were always considering going for an EV, there may not be a better time to get excellent value in the used car market.
Source: Cox Automotive
