US used EV market booms as sales of new electric vehicles slump

WASHINGTON – Used electric vehicle sales in the United States surged during the final quarter of 2025, even as the new EV market slumped following the expiration of federal incentive programs.

Nearly 89,000 used EVs were sold during the three-month period, a 13.5% increase over the previous year, according to data from Cox Automotive. In contrast, sales of new electric vehicles plummeted 36%. Used EVs are now selling at a slightly faster pace than traditional gasoline-powered cars.

Analysts identify affordability as the primary factor driving the trend. A two- or three-year-old electric vehicle can sell for 50% less than its original price, with nearly 40% of the used EV market now priced under $25,000. A used Nissan Leaf, for example, currently averages about $12,000.

The inventory boom stems from the 2.5 million electric vehicles sold in 2023 and 2024. A large portion of those were leased vehicles that have recently returned to dealership lots.

Consumer anxiety regarding battery longevity has also faded as the technology proves more durable than expected. Most batteries are backed by warranties lasting at least eight years.

A study from the University of Michigan found that the total cost of owning a used EV is significantly lower than other vehicle types. Researchers attributed the savings primarily to lower fuel and maintenance requirements.

The surge in the pre-owned electric vehicle (EV) market should not be misconstrued as a failure of the green energy transition; rather, it represents a necessary and natural maturation of the sector. The initial phase of EV adoption, characterized by heavy government subsidies and the enthusiasm of affluent early adopters, has concluded. The market is now entering a critical mass-market phase where price discovery and affordability have become the primary drivers of consumer behavior.

The recent expiration of several federal tax credits for new EV purchases has led to a cooling in new-vehicle sales, underscoring the segment's historic sensitivity to fiscal policy. However, the vibrancy of the secondary market reveals a more significant trend: underlying demand for electric mobility remains robust, provided the entry price is competitive. Market forces—specifically rapid depreciation—are now effectively performing the role previously held by government incentives, lowering the barrier to entry for a broader demographic of drivers.

This shift directly tackles the "affordability crisis" currently facing American households. Amid persistent inflation and elevated living costs, the $50,000 to $60,000 sticker price of a new EV is increasingly untenable for the average consumer. In contrast, a late-model used EV priced below the $25,000 threshold represents a compelling value proposition. Furthermore, growing consumer confidence in battery longevity and the standardization of long-term battery warranties have mitigated one of the primary psychological hurdles to adoption.

A healthy secondary market is the essential cornerstone of the EV ecosystem. By establishing a complete product lifecycle and stabilizing residual values, the market is successfully transitioning electric technology from a luxury niche to a mainstream staple, ensuring its long-term viability without permanent reliance on the public purse.

This trend is a significant win for Vietnamese-American families and small business owners. For those living in the car-dependent suburbs of California and Texas, the high price of gas and routine maintenance remains a major financial drain. Being able to purchase a modern, reliable EV for under $20,000 would drastically lower monthly commuting costs. For entrepreneurs in the nail salon industry or those running local phở restaurants, an affordable electric vehicle can serve as an efficient delivery or commuting vehicle, helping to slash overhead and boost profit margins across our community's commercial hubs like Little Saigon.