Imminent EV Lease Returns to Impact Used Market and Resale Values

Once a stronghold in resale value, electric vehicles (EVs) are now facing a downturn. With an impending surge of EV lease returns, the used market is about to experience a shake-up that could significantly devalue older electric models.

A New Era for Used EVs

Cox Automotive forecasts that a substantial number of EV leases will be returned in the coming year, leading to an imbalance in supply and demand. This influx, coupled with advancements in EV technology and decreased consumer interest, is expected to drive down prices. EV owners are advised to consider selling sooner rather than later to avoid potential financial losses.

Impact of Previous Incentives

From January 2023 to September 2025, a federal tax credit of $7,500 encouraged the leasing of over 1.1 million EVs. With many of these leases reaching their end, the used market is bracing for an influx of vehicles by April this year. The anticipated volume of returns is likely to exert downward pressure on used EV prices.

Lease Market Dynamics

During the pandemic, vehicle market values exceeded lease buyout prices, prompting many to purchase their leased vehicles. However, as market conditions normalize, buyout prices now surpass market values, leading to an expected increase in lease returns. This trend is poised to flood the used market and impact EV values.

Strategic Timing for Sellers

Given the anticipated market saturation, current EV owners are encouraged to trade in their vehicles before prices plummet. According to Jeremy Robb, interim chief economist at Cox Automotive, “If you’ve purchased the car, and you know you’ll need to trade it in, then sooner than later would be better.”

Model-Specific Depreciation

Among the anticipated wave of lease returns, certain models like the Ford Mustang Mach-E, Volkswagen ID.4, Hyundai Ioniq, Tesla Model 3, and Tesla Model Y are expected to experience significant depreciation. Current data from CarEdge reveals that these models could see depreciation rates as high as 63% over five years.

Dealerships and automakers face the challenge of managing this anticipated market shift. Strategies may include encouraging lease extensions to mitigate the influx of returns. For consumers, the evolving market presents both challenges for sellers and potential opportunities for buyers looking for affordable used EVs.