In a nutshell: While new EV sales have crashed, the rising price of gas has caused a spike in purchases of used electric vehicles. The average gas price of $4 per gallon is a big incentive for drivers to switch to electric, but a slew of expiring EV leases is also a factor.
According to Cox Automotive, sales of new electric vehicles in the US were down 28% year on year in Q1 2026 after the Trump administration killed off the $7,500 consumer tax credit.
It's a different story for used EVs. Cox writes that this segment saw sales rise 12% compared to the same period a year ago, and were up 17% over the previous quarter.
Gas prices in the US recently surpassed $4 per gallon, the most expensive it's been since Russia invaded Ukraine in 2022. Moreover, as is the case with pretty much everything right now, the average purchase price of a new car has increased, reaching a near-record level. That's obviously causing a lot of interest in EVs, but there is another element.
As reported by the Financial Times, hundreds of thousands of pre-owned EVs that were purchased using leasing schemes in the early 2020s are now entering the market as those leases expire.
According to credit reporting agency Experian, EVs will account for 15% of all off-lease vehicles at the end of this year, up from 7.7% in the first quarter.
That sudden rise in the number of pre-owned EVs has helped push their prices lower, dropping 8.5% between February 2025 and February 2026. Cox writes that the average price of a used EV is $34,821, almost the same as the gas-powered equivalent of $33,487.
Whether high gas prices will lead to a surge in new EV sales is still unclear, according to analysts. Consumers remain concerned about their ability to make long journeys in a large country with inadequate charging infrastructure.
It's not just the US where demand for used EVs has exploded. It's also happening in Australia as more drivers worry about the impact of the Iran war on fuel costs. But unlike the US, this has led car dealerships to increase the prices of used EVs.