A Wave of Used EVs Is Coming: What It Means for the Market
Over one million off-lease electric vehicles are expected to enter the U.S. used car market between 2025 and 2028, potentially driving down prices for cost-conscious buyers.
Projected Supply Increase
According to Cox Automotive, the number of EV leases expiring in the U.S. is set to climb dramatically:
- 2025: 123,000
- 2026: 300,000
- 2027: 600,000
- 2028: 660,000
Since most leased vehicles are returned to the market, this surge could result in over one million used EVs becoming available during this period.
Market Context
Used cars already dominate the U.S. auto market. In 2024, they accounted for approximately 76% of all vehicle sales, a trend driven largely by lower prices compared to new vehicles.
The price gap is stark. According to Consumer Affairs, the average price of a new vehicle in 2024 was $46,992, while the average used vehicle sold for just $27,113.
Depreciation is a key factor. The New York Times reported a striking example at AutoNation: a 2023 Hyundai Ioniq 5 with 18,000 miles was listed for $28,000—down nearly 52% from its original price of $58,000 three years prior.
Contributing Factors
The upcoming influx of off-lease EVs is directly tied to leasing patterns that emerged after the Inflation Reduction Act (IRA) of 2022.
A critical provision within the IRA classified EV leases as "commercial vehicle" sales. This classification exempted the leases from certain North American content requirements, allowing automakers to combine federal and state incentives.
These policies led to highly competitive lease offers in 2022, with some vehicles available for low monthly payments in certain states. Given that typical lease terms range from 24 to 36 months, leases initiated in 2022 began expiring in late 2024. The volume of expirations is expected to accelerate and peak around 2028.
Potential Market Implications
The increased supply of used EVs is anticipated to further depress prices. Although used EVs have historically experienced greater depreciation due to concerns about battery life, experts cited in the reports indicate that modern EV batteries demonstrate strong durability.
A larger pool of affordable, relatively low-mileage used EVs is expected to attract cost-conscious buyers. Some analysts suggest that this trend could, over time, improve the residual value of used EVs by providing consumers with practical ownership experience. This may also help address consumer anxieties regarding battery maintenance.
Temporary Nature of Supply
Reports from The New York Times indicate that the current increased supply of used EVs may be temporary. Data cited by the Times shows that new EV sales and leases declined 36% year-over-year from the end of 2024 to the end of 2025, with a further decline recorded in the first quarter of 2026.