2026 will be the ‘year of the used EV,’ analyst says. Here’s why

The price of used electric vehicles has come down to levels comparable with gasoline cars, a dynamic poised to boost their popularity despite the loss of a federal tax incentive for EVs, according to auto analysts.

In August, the price premium for used EVs relative to used vehicles with a gasoline engine narrowed to just $897, on average, the smallest price gap on record, according to Cox Automotive.

The average list price for used EVs was $34,704 in August, down 1.1% from July and 2.6% from a year earlier, it found.

This price tag excludes a federal tax credit that ended after Sept. 30, after Republicans scrapped it as part of a multitrillion-dollar legislative package in July. That tax break was worth up to $4,000 for used EVs (and $7,500 for new EVs) — meaning the average used EV cost less than its gasoline counterpart after incentives.

Consumers bought nearly 41,000 used EVs in August, up 59% from a year earlier, Cox data shows.

Analysts expect that momentum to continue, driven in large part by affordability even absent the federal tax break.

2026 will be “the year of the used EV,” said Scott Case, the CEO of Recurrent, an EV market research firm.

Since 2023, more than 1.1 million EVs have been leased, Stephanie Valdez Streaty, director of industry insights at Cox, wrote in an analysis last month.

This was partly due to the so-called leasing “loophole.” Consumers could more easily claim a $7,500 tax credit when leasing a new EV than buying one, the latter of which came with more restrictions.

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Now, a large volume of electric vehicles are reaching the end of their lease term. Lease returns and trade-ins are boosting the supply of used EVs, driving down prices, Valdez Streaty wrote.

In fact, 14 used EV models had a lower average price than their gasoline counterparts in August, according to Valdez Streaty.

“For mainstream buyers, EV affordability in the used-vehicle space is finally within reach,” Valdez Streaty wrote.

The top-selling models — Tesla Model 3, Tesla Model Y, the General Motors-owned Chevrolet Bolt EV, Tesla Model S and Ford Mustang Mach-E — all had prices below the market average in August, which shows their appeal to budget-conscious buyers consumers, Valdez Streaty wrote.

For example, two high-volume models — the Renault-owned Nissan Leaf and the Tesla Model 3 — carried an average price tag of $12,890 and $23,278, respectively, according to Valdez Streaty. The Chevrolet Bolt EV was $14,705.

By contrast, the market for new electric vehicles is likely to struggle for…