New EV Sales Drop 28% in Q1 2026, While Used Cars Rise 12%

EVs in the US: New sales fall 28% in 1Q 2026 following the end of the tax credit; used cars rise 12% and nearly match gasoline car prices.

Two realities dominate the electric vehicle market in the US in 2026: new EV sales are falling after the expiration of the tax credit, while used EVs are gaining momentum among consumers.

Sharp Drop in New EVs After Credit Ends

In the first quarter of 2026, new EV sales totaled 212.6 thousand units, a 28% drop compared to 1Q 2025 (296.3 thousand).

Market share stood at 5.8% of total new vehicle sales, matching the performance of 4Q 2025, and still below the peak of 7.5% recorded in 3Q 2025.

• The federal tax credit of US$ 7,500 expired on September 30, 2025, and no replacement was enacted.
• The EV inventory stands at 130 days supply, 46% higher than the 89 days for combustion engine vehicles.
• The average transaction price fell to US$ 55,300 in February, narrowing the gap with gasoline cars to a record US$ 6,500.
• Tesla, still the market share leader among EVs, sold approximately 122,196 units in 1Q, accounting for 3.3% of the market.
• Total new vehicle sales fell 6.5% to 3.67 million, with a SAAR of 15.5 million.

Used EVs: Momentum Against the Trend

While the new segment is slowing down, the used market is growing: 93,500 used EVs were sold in 1Q 2026, an increase of 12% compared to 83,587 in 1Q 2025 and 17% above 4Q 2025.

The average price for used EVs reached US$ 34,821, just US$ 1,300 shy of the US$ 33,487 for used gasoline cars — a parity not seen in years.

• The used EV inventory turnover is 42 days, close to the 38 days for ICEs.
• Lease returns, fueled by the IRA's so-called “leasing loophole” between 2023 and 2025, are feeding the used market.
• The projection for lease returns in 2026–2028 points to up to 240 thousand monthly returns, with about 50 thousand EVs per month.

The Paradox: More EVs on the Road, Fewer New Sales

It is estimated that there are about 5.8 million EVs circulating in the US. Public charging sessions reached 141 million in 2025, a 30% increase.

Electrified vehicles, including hybrids, reached 26% of new vehicle sales in 4Q 2025, a jump of almost 4 percentage points YoY.

• HEVs registered 756 thousand units in 4Q 2025, a 57% YoY increase. Toyota holds 43% of hybrid sales; Honda accounts for 16.3%.

With the credit gone, the main price argument that made new EVs competitive loses strength for many cost-sensitive buyers, favoring used cars or hybrids.

Outlook for 2026

Cox Automotive's projection for the year indicates:

• Total new vehicle sales in 2026 of 15.8 million, a 2.6% drop compared to 2025.
• Lease penetration at 22% (down 2 p.p.).
• Used market at 20.4 million units.

Tariff costs estimated at US$ 35 billion in 2025 also weigh heavily, with pass-throughs of about US$ 3,800 per vehicle via MSRP adjustments, destination fees, and tighter incentives. This environment increases the attractiveness of used EVs, reinforcing the total cost of ownership compared to gasoline equivalents.

In summary, the reading is that the momentum for new EVs has been braked by the fiscal change, while the used segment is gaining the lead in adoption. The remaining question is whether the momentum from lease returns can indeed sustain a wave of newer used EVs in the market and stimulate future new EV buyers.

What do you think: can this used EV boom reignite demand for new EVs in the coming months? Leave your opinion in the comments.