Last fall, when the federal tax credits for EVs expired and EV demand dropped off, our industry faced a question: Did this moment effectively mark the beginning of the end of the EV market?
Looking back, this question was more about the drama of the moment than a true reflection of how the EV market would perform in the months ahead. After all, dealers sold a lot of new EVs in recent years, many through leases, and long-view observers understood these vehicles would eventually come back around.
Today, we know those off-lease EVs are coming back around, and we believe they represent a growing opportunity for dealers that extends beyond the metro markets where EVs gained an initial foothold and became common to see on the road.
Here are some data points on the used EV market drawn from data vAuto’s drawn from the movement of EVs in/out of dealer inventories. We believe the data suggests that, for dealers who have shied away from buying and selling used EVs, the market’s worth another, more nuanced look to find your opportunity.
Market Incoming: 1 Million Off-Lease EVs
Most dealers are aware that the sale of new EVs in recent years arrived through a combination of different incentives to get the cars into the driveways and garages of consumers. Cox Automotive analysts expect dealers will see 1 million off-lease EVs re-enter the market in the next two years.
And, make no mistake, they’re already arriving.
For example, used EV sales reached 30.8K units in February in the broader wholesale market, marking a 4.2% increase month over month and a 28.8% increase year over year. At Cox Automotive’s Manheim auctions, February brought a 33% increase year over year in used EV sales.
As we look at vAuto inventory data, it’s clear that some of the increases in EV auction volume flow from dealers wholesaling the vehicles due to negative equity.
But that’s only part of the story when you take a closer look at how dealers are appraising EVs, and the types of EVs they choose to retail.
Dealers Appraising, Taking In More Used EVs
Below, the chart shows the average monthly volume of used EV appraisals across all vAuto dealers from last year and the first two months of 2026. The big headline here is that dealers are, in fact, appraising more used EVs when they show up at the door, and when they are in the auction lanes.
You can also see the volume of used EV appraisals has gained momentum, especially in the first two months of 2026.
And, here’s the big question, OK, dealers are appraising more used EVs, but are they taking them into their inventories or just appraising them to make deals and send the EVs to auction?
vAuto data suggests the reality on the ground is a mix of both, depending on the dealer. From the chart below, you can see the volume of used EVs dealers have been and are currently stocking.
The big headline here is that the monthly average number of used EVs in dealer inventories is up by 9%.
Looking at the blue bars from left to right, you can also see how the incentives and tax credits have shaped used EV inventory decisions in recent months: A peak in late summer/early fall of last year reflects the spike in EV demand and sales when dealers and consumers understood that the tax credits would go away.
Now, the next question might be what’s the make-up of the used EV inventory dealers are taking in?
EVs Under $25K Driving Greatest Inventory Growth
To answer this question, we broke down the used EV inventory by price bucket. We thought we might see dealers leaning into lower-cost EVs to help address the affordability problem we’re seeing in new vehicles and, given the supply crunch for affordable ICE vehicles, provide an alternative for those customers.
That’s exactly what we see when we look at the vAuto data in the chart below:
Across the price buckets, you can see that dealers are stocking more $25K and under used EVs than they did in the past year.
And you can also see that, in 2026, the first wave of off-lease used EVs is returning to the market, which helps explain the growth in $35K-plus EVs in used inventories.
Dealers who haven’t earnestly entered the used EV market may wonder how well dealers do when they stock and retail the vehicles. We thought a good way to answer this question would be to look at how much dealers had to discount their asking prices to move the EV inventory.
Discounting Diminishes Across EV Value Segments
This chart shows that price discounting across all three used EV price buckets has diminished…especially when we look at the first two months of 2026.
The data suggests what analysts have been saying: The used EV market is normalizing, giving dealers a better line of sight into the used EVs that can work for them, in their markets, and manage these investments effectively.
What Used EV Models are Moving?
One of the reasons some dealers have stayed on the sidelines of the used EV market owes to the dominance of Tesla vehicles in the pool of EVs on the road. The company has been a dominant player in the EV market for years, but the rise of off-lease EVs and other factors are bringing more make/model diversity into the mix.
But the rise of off-lease EVs and other factors are bringing more make/model diversity into the mix. The chart below shows the rise of non-Tesla, used EVs under $25K in dealer inventories:
Dealers who retail these used EVs say customers regard them as affordable alternatives to older, higher mileage and less technically sophisticated ICE vehicles they can buy today for the same money.
As dealers look ahead, it’ll be important to monitor the EVs that are selling in your market to size up and pursue the opportunity. It’s also important to recognize that some markets support EV sales more naturally than others.
In addition, from our conversations with dealers who have made EVs a key part of their used vehicle retailing strategy, it’s important to teach and train your sales teams to speak intelligently with customers about available incentives, through state and local governments as well as power companies, that can help make deals and set the stage for each customer’s EV ownership experience.
A Closing Point
As the EV market evolves, the market will inform where dealers may find opportunity and risk as they retail used EVs. In the months ahead, it’ll be important for dealers to understand the rise of used EV availability and sales in their local markets. This data will give you the guideposts to shape, if not scale, a successful used EV retailing strategy.
