Surge in Used EV Sales as Fuel Costs Rise
In a significant shift within the automotive market, used electric vehicles (EVs) saw a notable increase in sales during July, growing by 7.7% from the previous month and 10.1% from the same time last year. This data, released by Cox Automotive, highlights a stark contrast to the modest growth in new EV sales, which rose by only 3.2% month-over-month and dropped by 41.5% compared to 2025 figures.
Scott Case, the CEO of Recurrent, attributes the spike in used EV sales to rising fuel costs, exacerbated by the ongoing conflict between the U.S. and Iran. Case told Grist, “The used market is so hot,” explaining that the higher gas prices are pushing more consumers towards electric alternatives. “The used EV market is pretty much uniquely the beneficiary of the war,” Case added.
Electric vehicles offer savings not only on fuel but also on maintenance costs, such as oil changes. Recent studies indicate that switching to an EV can significantly reduce emissions, even when replacing a relatively new internal combustion vehicle. Despite these benefits, the upfront cost of new EVs remains a barrier, with prices averaging $6,477 more than traditional gas-powered cars.
Jimmy Douglas, founder and CEO of Plug, a marketplace for EVs, emphasized the impact of this price difference, stating, “In today’s economy, with high interest and wavering affordability, that’s a very material difference. A lot of it comes down to affordability.” In contrast, the price gap between used electric and gas vehicles is much smaller, at $2,967, making them a more attractive option for budget-conscious consumers.
According to Stephanie Valdez Streaty, director of industry insights at Cox Automotive, a large supply of used EVs is expected to enter the market as leases expire, promising a robust secondary market. She noted, “There are so many used EVs available at a good price point.”
Despite the strong performance of Tesla’s Model Y as the top-selling new electric car, many American automakers have curtailed their EV offerings. Scott Case remarked on this trend, saying, “The party has completely stopped,” particularly highlighting Stellantis’s decision to scale back its electric vehicle production. “The Japanese models have been coming in like a freight train,” he added.
The current market dynamics follow last year’s legislative changes when Congress removed tax credits for new and used EVs. The absence of these credits, valued at $7,500 and $4,000 respectively, initially led to a drop in sales. However, Case expressed surprise at the resilience of the used EV market, noting, “Literally no one would have predicted that after a year with no $4,000 rebates on the table, that we’d now be doing 10 percent more sales. That defies expectation.”
North American EV sales have faced challenges, with a reported 18% decline this year, contrasting sharply with Europe’s 28% increase. As George Whitcombe, senior EV analyst for Benchmark Mineral Intelligence, stated, “July marked the return of more significant, negative year-on-year growth rates.” Despite these setbacks, some signs indicate stabilization in the new EV market in the U.S., with consistent month-over-month growth and quick sales similar to gas-powered vehicles.
Looking forward, used EVs are expected to play a pivotal role in the market’s evolution. Stephanie Valdez Streaty commented on the potential for growth, stating, “Even though it’s still a small share of the overall market, it’s the trajectory. I think it’ll continue to grow.”
Original Story at grist.org