New EV sales drop 28% in Q1 2026, but used EVs surge 12% to near-record levels
Why it matters: The EV market is bifurcating, creating a historic buying opportunity for used electric vehicles.
- New EV sales dropped 28% year-over-year in Q1 2026 to 212,600 units, with market share falling to 5.8% of total new vehicle sales, according to Cox Automotive.
- The expiration of the $7,500 federal EV tax credit on September 30, 2025, is identified by Cox Automotive as the primary cause for the collapse in new EV sales.
- New EV inventory has ballooned to a 130-day supply, significantly higher than combustion vehicles, forcing automakers to increase incentives and driving average transaction prices down to $55,300.
- Used EV sales surged 12% to 93,500 units in Q1 2026, with average prices of $34,821 now within $1,300 of used gas cars, a near-parity unprecedented in the market.
- Lease returns from EVs leased between 2023 and 2025 are beginning to flood the market, a trend expected to accelerate the growth in used EV availability and affordability, as noted by Cox's Deputy Chief Economist Mark Strand.
The US electric vehicle market is experiencing a dramatic split: new EV sales plummeted 28% in Q1 2026 following the expiration of federal tax credits, leading to a glut of inventory and falling prices. Conversely, the used EV market surged 12%, with prices nearing parity with gas cars, driven by strong consumer demand and an influx of lease returns.
