Filenews 19 October 2025
The price of used electric vehicles in the United States has fallen to levels comparable to those of gasoline-powered cars, a dynamic that is expected to boost their popularity, despite the loss of the tax incentive for electric vehicles, according to analysts in the auto buying and selling sector.
In August, the price difference for used electric vehicles in the U.S., relative to used gasoline-powered vehicles, narrowed to just $897, on average, the smallest price difference ever recorded, according to Cox Automotive.
The average list price for used electric vehicles was $34,704 in August, down 1.1% from July and 2.6% from a year earlier, according to the survey.
That price does not include the federal tax credit that expired after Sept. 30 after Republicans scrapped it as part of a multi-trillion-dollar legislative package in July. This tax relief was up to $4,000 for used electric vehicles (and $7,500 for new electric vehicles) – meaning that the average used electric vehicle cost less than its gasoline counterpart after the incentives.
Consumers bought nearly 41,000 used electric vehicles in August in the U.S., up 59% from a year earlier, according to Cox data.
Analysts expect this momentum to continue, propelled in large part by affordability, even without federal tax relief.
2026 will be "the year of used electric vehicles," said Scott Case, CEO of Recurrent, an electric vehicle market research firm.
Automakers have relied heavily on leasing in recent years to move electric vehicles, analysts said.
As of 2023, more than 1,1 million electric vehicles have been leased, Stephanie Valdez Streaty, director of industry information at Cox, wrote in an analysis last month.
This was partly due to the so-called "loophole" of the lease. Consumers could more easily claim a $7,500 tax credit when leasing a new electric vehicle than when buying one, which came with more restrictions.
Now, a large volume of electric vehicles is reaching the end of their lease term. Lease returns and exchanges boost the supply of used electric vehicles, driving down prices, Valdez Streaty wrote.
In fact, 14 used electric vehicle models had a lower average price than their gasoline counterparts in August, according to Valdez Streaty.
"For key buyers, the affordability of electric vehicles in the used vehicle space is finally achievable," wrote Valdez Streaty.
For example, two large-scale models — the Renault-owned Nissan Leaf and Tesla Model 3 — had an average price of $12,890 and $23,278 respectively, according to Valdez Streaty. The Chevrolet Bolt EV cost $14,705.
The purchase of new
In contrast, the new electric vehicle market is likely to face difficulties for the remainder of 2025 and into next year, analysts said. The average prices of new electric cars in August were $57,245, representing an increase of nearly $9,100 over the average gasoline-powered car, according to Cox Automotive.
That doesn't include the now-abolished $7,500 federal tax credit, which brought new electric vehicles closer to price parity with their gasoline counterparts. "The tax deduction has helped a lot of people get positions," Aaron Bragman, head of the Cars.com's Detroit office, told CNBC. "It helped a lot of people get electric vehicles."
The U.S. electric vehicle market can grow without subsidies, says former Tesla chairman John McNeil. However, there are still some relatively affordable new electric vehicles, even without the federal tax break, he said.
For example, the 2025 Nissan Leaf has a starting price of under $30,000, Bragman said.
"The end of the (tax) deduction does not mean the end of affordable electric vehicles," Bragman wrote in an email. "Brands like Nissan, Chevrolet and Hyundai are launching lower-priced options, while used electric vehicles are also becoming more attractive, with many available under $25,000. The cost of batteries is also falling, which will help maintain price competitiveness in the long term."
For key buyers, the affordability of electric vehicles in the used vehicle space is finally within reach. In fact, the expiration of the tax break does not seem to negatively affect the interest of prospective buyers of new cars, according to JD Power.
More than half of new vehicle buyers are either "very likely" (24%) or "somewhat likely" (35%) to consider buying an electric vehicle in the next 12 months, rates that have remained fairly stable over the past year, according to a study by JD Power conducted in September.
Other Incentives from United States of America
While the U.S. tax incentive for electric vehicles has been eliminated, there are additional incentives available from utilities, automakers, and state and local governments that can, in some cases, reduce the initial cost of an electric vehicle by thousands of dollars, experts said.
California, Colorado, Connecticut, Maine, Massachusetts, New Jersey, New York and Rhode Island are among the states offering generous incentives, the analysts said.
"There is still a lot of government support for these electric vehicles," said Al Salas, CEO of Eco Auto, an electric vehicle dealership with operations in Massachusetts and Washington state.
Total Cost of Ownership and Charging
Consumers should focus on the total cost of ownership rather than the initial purchase price when choosing a car, analysts say.
This means that the car owner should consider not only the initial purchase price, but also the entire financial cost, such as repairs, maintenance, and fuel.
Such costs are generally cheaper for electric vehicles and, therefore, can make the lifetime cost of owning an electric vehicle less expensive than that of a gasoline-powered car, according to studies and industry experts.
"I think that's the biggest argument" in favour of electric vehicles, Case of Recurrent said.
Factors such as geography and accessibility to charging are important, analysts said. For example, the heavy reliance on public charging networks can tip the economic calculation, as public charging is often more expensive than charging at home, they said.
