An influx of used EVs could drive down prices

A staggering 660,000 electric vehicle leases are set to expire in 2028, flooding the market with used EVs and potentially driving down prices. This surge in used vehicles is expected to more than double from 2026, when 300,000 leases are set to expire, and nearly triple from 2025, when just 123,000 leases expired. The majority of leased vehicles end up on the used market, which means over a million used EVs could become available over the next few years, making them more accessible to budget-conscious buyers. The impact on the market could be significant, with prices potentially dropping by as much as 20% due to the increased supply of used EVs. For example, a 2022 Nissan Leaf with a range of 226 miles could see its price drop from around $30,000 to $24,000. This could make EVs more competitive with gas-powered vehicles, with the average price of a used gas-powered car being around $22,000. Background context on the electric vehicle market shows that high prices have been a major barrier to adoption, with the average price of a new EV being around $50,000. However, as more models become available and manufacturers increase production, prices have begun to fall. For instance, the 2023 Chevrolet Bolt has a starting price of around $38,000, down from $44,000 in 2020. What to expect next is a significant shift in the used car market, with EVs becoming a more viable option for buyers who cannot afford a new vehicle. In fact, a study by Cox Automotive found that 71% of car buyers consider purchase price to be the most important factor when buying a vehicle. The Future of Electric Vehicles As the used EV market grows, we can expect to see a wider range of models available, including luxury brands like Tesla and Audi. For example, a used 2020 Tesla Model 3 with a range of 250 miles could sell for around $35,000, down from its original price of around $45,000. This could attract a new wave of buyers who are looking for a luxury vehicle without the luxury price tag. The Impact on Manufacturers Manufacturers will need to adapt to the changing market by adjusting their pricing strategies and production levels. For instance, General Motors has announced plans to launch 20 new EV models by 2025, with a goal of making EVs more affordable and accessible to a wider range of buyers. This could include offering more competitive pricing on new EVs, as well as providing incentives for buyers to trade in their old vehicles for new ones. The Bottom Line The influx of used EVs on the market will be a game-changer for the industry, making electric vehicles more affordable and accessible to a wider range of buyers. With prices potentially dropping by as much as 20%, we can expect to see a significant increase in demand for used EVs, and a shift in the way manufacturers approach the market.