Federal tax credits for electric-vehicle leases that qualified many models not eligible for the breaks if purchased have spawned a large volume of EVs set to pump up the used-vehicle market.
J.D. Power research indicates leases of new EVs skyrocketed 355% last year in a trend that continued this year, albeit at a much slower pace, up 88% through September. The spike has been even more pronounced for franchise sales alone, up 438% last year, excluding Tesla sales, and up 109% this year through September.
That’s in sharp contrast to leases of gas-powered vehicles, which are still down from levels seen before the pandemic and therefore poised to contribute to used-vehicle shortages next year and in 2026, J.D. Power said. In fact, it said gas-powered and EV lease returns combined are down 37% from 2020.
The unusual EV lease activity, though, should at least help shore up overall used availability. Returning EV leases are expected to jump in 2026 by 230%, J.D. Power forecasts.
Complicating the used supply picture, though, is the question of whether the federal EV credits will continue under the incoming Trump administration, since Trump has said he will eliminate EV adoption and production incentives. It’s also unclear if automakers will continue incentives.
Those questions, combined with consumer concern about long-term EV battery life, could bring new instability to the used market, J.D. Power said, complicating “the traditional balance of supply and demand.”
