Used EV Sales Surge as New Car Demand Plummets

The United States is seeing a record surge in used electric vehicle (EV) sales, with a 17% increase during the first four months of 2026. This growth is particularly pronounced in Southern California, where Mobility Global forecasts a 20% increase in used EV registrations for the year. The trend is driven by soaring gasoline prices resulting from the U.S. and Israel-led war against Iran, as well as a growing supply of affordable pre-owned vehicles from expiring leases.

Conversely, the new EV market is in decline. Sales in California are projected to plummet 22% in 2026, while national sales saw a 27% plunge. This downturn is attributed to the expiration of federal tax credits under the One Big Beautiful Bill Act. The shift in demand has led some automakers to cancel new models, including the Honda Prologue and an electric version of the Ford F-150. To counter this, California launched the MyFirstEV program, a $270 million joint initiative with 13 automakers providing rebates of up to $3,500 for first-time buyers.

Market data shows a bifurcated economic landscape. Cox Automotive reports that nearly 40% of used battery-powered cars on dealer lots are priced below $25,000, creating a strong appetite for first-time EV buyers. However, while large dealerships report high demand, smaller operators cite a sales slowdown caused by inflation and tightening credit.