Gasoline prices aren’t the only factor driving used EV sales

The most recent electric vehicle sales data provided a bleak picture, at least for new EVs. According to Cox Automotive, sales of new electric vehicles fell about 28% in the first quarter compared to the same period last year after the Trump administration cut the $7,500 consumer tax credit.

Used electric vehicles are moving in the opposite direction. And two catalysts combined to supercharge those sales.

According to a Cox Automotive report, used EV sales in the first quarter increased 12% compared to the same quarter last year. There is some momentum in the near term as well. Used EV sales increased 17% between the fourth and first quarters.

Rising gasoline prices, with average prices exceeding $4 per gallon, have helped drive interest in and sales of electric vehicles. But there are other factors at play in consumers’ search for affordable options. There is an abundance of leases expiring immediately, the Financial Times reported. EV leasing was a popular option in the early 2020s, and now hundreds of thousands of used EVs are hitting the market as leases expire. And consumers are ready to accept it.

The FT reported that by the end of this year, electric vehicles will account for 15% of all rental vehicles, doubling from 7.7% in the first quarter.

The old economic principles of supply and demand remained unchanged. The surge in used cars has driven down prices and further increased sales. This has led to prices at or close to price parity with internal combustion engine vehicles. According to Cox Automotive, the average price of a used EV is $34,821, compared to $33,487 for a gasoline engine.