Analysts say 2026 will be the “year of used EVs.” This is the reason

According to car analysts, the prices of used electric vehicles have reached levels comparable to gasoline vehicles.

In August, the price premium for used EVs compared to used vehicles with gasoline engines narrowed to the lowest price gap on record, averaged $897, according to Cox Automotive.

The average price of used EVs was $34,704 in August, down 1.1% from July and 2.6% from the previous year.

This price tag excludes federal tax credits that have ended after September 30th after Republicans discarded it in July. That tax credit was up to $4,000 for used EVs (and $7,500 for new EVs). This means that the average EV cost is lower than the gasoline counterpart after incentives.

Consumers purchased nearly 41,000 used EVs in August, showing Cox data, up 59% from the previous year.

Analysts hope that even without a federal tax credit, the momentum driven largely by affordability will continue.

2026 will be the “year of used EVs,” said Scott Case, CEO of EV market research firm Recurrent.

Analysts say automakers have been leaning heavily towards leasing in recent years to power electric vehicles.

More than 1.1 million EVs have been leased since 2023, Stephanie Valdez Streety, Cox’s Director of Industry Insights, wrote in an analysis last month.

This was part of what was caused by the so-called lease “loophole.” Consumers can claim a $7,500 tax credit more easily than buying a new EV.

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Currently, a large number of electric vehicles have reached the end of their lease period. Valdez Streety writes that lease returns and trade-ins are increasing the supply of used EVs and lowering prices.

In fact, according to Valdez Streety, the average price for the 14 used EV models was lower than gasoline in August.

“For mainstream buyers, the affordable prices for used car space EVs are finally within reach,” writes Valdez Streety.

Top Seller Models – Tesla Model 3, Tesla Model Y, General Motors– Owned Chevrolet Bolt EV, Tesla Model S and Ford Mustang Mach-E – All prices below the market average in August show that they appeal to budget-conscious buyers’ consumers, writes Valdez Streety.

For example, two mass models – Renault– According to Valdez Streety, the Nissan Leaf and Tesla Model 3 – had an average price of $12,890 and $23,278, respectively. The Chevrolet Bolt EV was $14,705.

In contrast, the new electric vehicle market is likely to struggle for the rest of 2025 and next year, analysts said.

According to Cox Automotive, the average EV price in August was $57,245, accounting for a premium of about $9,100 over the average gasoline vehicle.

This does not include the currently announced $7,500 federal tax credit. This brings new EVs closer to price parity with their gasoline counterparts.

“The tax credit helped me get lots of butts in my seat,” Cars.com Detroit Director Aaron Bragman told CNBC. “It helped a lot of people get into the EVS.”

But he said there are still some new electric vehicles that are relatively affordable, even without the federal tax credit.

For example, Bragman said the 2025 Nissan Leaf has a starting price of less than $30,000.

According to Cars.com, several other Fiat 500e, Hyundai Kona Electric and Chevrolet equinox EVs have starting prices of less than $35,000.

“The end of (tax) credits does not mean the end of an affordable EV,” Bragman wrote in an email. “Brands like Nissan, Chevrolet and Hyundai are offering low-cost options, making used EVs more attractive, and they’re well available for under $25,000, and they also reduce battery costs.

In fact, according to JD Power, the expiration of the tax cuts does not seem to have a negative impact on interest among future new car buyers.

A September survey by JD Power found that over half of shoppers on new vehicles are considering considering purchasing “very likely” (24%) or “somewhat” (35%) EVs.

Analysts said consumers should focus on the total cost of ownership, rather than the prepaid purchase price when choosing a car.

This means that car owners need to consider not only the upfront purchase price, but also the full financial costs such as repairs, maintenance, and fuel.

Research and industry experts say these costs are generally cheaper for electric vehicles, making the lifetime cost of EV ownership cheaper than gasoline-powered vehicles.

“I think this is a bigger argument,” he said in favor of EVS, recurring case.

Factors such as geography and charging accessibility are important here, analysts said. For example, if you rely heavily on public charging networks, public charging is often more expensive than charging at home, and they said it could turn economic accounts over.

The tax incentives for federal electric vehicles have disappeared, but there are additional incentives available from utilities, automakers, state and local governments, and in some cases you can shave thousands of dollars from the upfront cost of an EV, experts said.

California, Colorado, Connecticut, Maine, Massachusetts, New Jersey, New York and Rhode Island are among the states that offer relatively generous incentives.

“We’re looking forward to seeing you get the most out of our business,” said Al Salas, CEO of Eco Auto, an EV dealer in Massachusetts and Washington.