- Sales of used electric vehicles are booming.
- Americans are on track to buy more than 100,000 secondhand EVs in Q2, a new record, according to new data from Cox Automotive.
- More choice, good prices and a raft of off-lease cars are helping drive the trend.
If America’s appetite for electric vehicles is hitting a wall, then somebody forgot to tell the used EV market.
Americans are on track to buy more than 100,000 secondhand EVs in the second quarter, according to preliminary estimates from Cox Automotive. Used EV sales are set to shoot up 27% from the first quarter and surge 45% year-on-year. In an EV landscape wracked with uncertainty around consumer demand and political headwinds, the booming used market is a bright spot.
“The used EV market is just on fire right now,” said Liz Najman, director of market insights at Recurrent, a firm that tracks battery health in plug-in vehicles. “The fact that we’re seeing more inventory available, but prices are steady and sales are up, goes to show that people have figured out that used EVs are a bargain.”
Photo by: Tim Levin/InsideEVs
Better Used EVs, And More Of Them
What’s behind this gangbusters growth? In part, we can chalk it up to time and simple math. The modern American EV market is still fairly young; around 250,000 electric cars were sold in 2020, and the market only crossed the million-unit mark in 2023. This means that more electric cars are now trickling into the used market than ever.
The federal EV tax credit’s so-called “leasing loophole,” a provision that relaxes various restrictions for cars that are leased rather than bought outright, has fueled an explosion in EV leasing since 2022. Those lightly used vehicles are starting to hit car lots in force.
“With more electric vehicles coming off lease, the supply of high quality, affordable, pre-owned EVs is growing rapidly,” Stephanie Valdez Streaty, Cox’s director of industry insights, said during a presentation of the firm’s quarterly estimates on Wednesday.
Crucially, experts say, secondhand options are also newer and better than before, offering more range and features. A few years ago, used EV shoppers on a budget would’ve been largely limited to low-range Nissan Leaf hatchbacks and Chevrolet Bolts. Now they can snag a few-year-old Tesla Model 3—still one of the best all-around EVs on the market—for well under $25,000. The Model Y, the automaker’s most popular model, is also a hit on the used market.
Earlier this year, there were numerous reports of people dumping their Teslas to protest Elon Musk’s role in slashing the federal government. But those cars aren’t just collecting dust on dealer lots, Najman points out. Far from it. In May, Cox found that there was just a 28-day supply of unsold used Teslas, the lowest of any brand on the secondhand EV market. That was also far lower than the 44 days of supply for used internal-combustion cars.
“All that says to me is there are people out there who need reliable cars, and they don’t have more than like $22,000 to spend, and Teslas are filling that void,” she said.
Used EVs: Way Cheaper Than New Ones
Indeed, another reason used EVs are heating up comes down to affordability, analysts say. A new EV will run you close to $58,000 on average, or around $10,000 more than a gas vehicle. That has priced out most consumers and remains one of the biggest limiters to EV adoption—even with $7,500 federal tax credits on offer.
The used market is far more forgiving. The average 1-to-5-year-old EV was listed for around $36,000 in May, only $2,000 more than the typical non-EV, according to Cox. Some cost far less than that: The Model 3 was America’s most popular used EV that month, with an average price of $23,160, the firm said. A $4,000 tax credit for people who fall under income caps and purchase cars that cost less than $25,000 can sweeten the pot, too.
“When you remove the barrier of upfront cost, used EVs become an even more compelling option, offering lower maintenance costs and in most cases, cheaper charging compared to gasoline,” Valdez Streaty said.
What’s Next For The EV Market?
While the used EV market is on a tear, the electric car industry as whole is hitting some speed bumps. New EV sales are set to fall 6% year-on-year this quarter, Cox says, driven primarily by a 20% drop in Tesla sales. Last year, growth in the EV market slowed considerably as the industry leader stumbled and as automakers ran up against an unexpectedly hesitant buyer base.
The looming end of pro-EV federal policies threatens to bog down EV progress in 2025 and beyond. EV tax credits for both new and used vehicles are on the chopping block, along with fuel economy regulations and incentives for battery manufacturers.
But there’s also a big reason to expect the used EV market to keep growing: that “leasing loophole” is the gift that keeps on giving. Some 1 million EVs have been leased since 2022, Cox says, and those will start flooding the used market in 2026 and 2027. So while the EV world looks murky right now, the used EV bonanza may just be getting started.
Got a tip about the EV world? Contact the author: Tim.Levin@InsideEVs.com