Gas prices aren’t the only factor fueling used EV sales

Electric vehicle (EV) sales data shows new EV sales dropped 28% in Q1, partly due to the loss of a tax credit. In contrast, used EV sales rose 12%, driven by high gas prices and an influx of expired leases, leading to more affordable options and price parity with gas vehicles. Currently, used EVs are becoming increasingly attractive to consumers.

Key Points

• New EV sales decreased 28% year-over-year due to the elimination of a $7,500 consumer tax credit by the Trump administration.
• Used EV sales increased by 12% compared to last year and 17% from Q4 to Q1.
• Rising gas prices (above $4/gallon) are boosting interest in EVs.
• An influx of expired leases from the early 2020s is increasing the supply of used EVs.
• By year-end, EVs will represent 15% of off-lease vehicles, up from 7.7% in Q1.
• The supply-demand dynamic is lowering prices of used EVs to a level comparable to internal combustion vehicles.

Relevance

• The decline in new EV sales reflects broader economic shifts influenced by policy changes.
• Rising fuel prices historically influence consumer preferences toward electric alternatives.
• The growing trend of electric vehicle leasing and subsequent resale aligns with sustainable transportation practices.

The shifting landscape of EV sales, with declining new EV sales but increasing used sales, highlights changing consumer dynamics in response to economic factors like fuel prices and lease structures.