New EV Sales Dropped 28%. But Used EVs Are Booming.

The end of EV tax credits and other pro-electrification regulations continued to put a damper on new EV sales in the first quarter of 2026. But that’s only part of the story: Used EVs are booming, according to new industry data out this week. 

First, let’s unpack what’s going on with new electric cars. 

Cox Automotive says that around 213,000 new EVs were sold in the first three months of the year, down 28% year over year and 9% from Q4 of 2025. EV market share landed at an estimated 5.8% of sales in Q1, matching Q4’s share. That’s a decline of about two percentage points year over year, and it’s well below the nearly 12% share we saw during Q3, when people rushed to claim the tax credit in its final days.

“The key theme is a market in transition,” Cox’s director of industry insights, Stephanie Valdez Streaty, said during a presentation on Wednesday.

The Hyundai Ioniq 6 is one of the amazing used EV deals to be had right now.

Photo by: Hyundai

It was clear that that pull-forward effect would impact sales, but that should become less of a factor as time goes on. In the coming months, we’ll get a better sense of where that market share may level out, based on consumer appetite for the EVs automakers continue to sell. That will also depend on the volumes car companies decide to produce, and how hard they choose to push EVs versus other powertrains. More high-quality EVs coming into play this year, like the new Chevy Bolt and BMW iX3 should lift sales, but more cancellations could mute the effect. 

One winner of Q1 is Tesla. Cox says its share of the EV market is up to over 50% again, after a dip last year. And its share of the entire car market held steady at 3.3% in Q1, matching the year-ago quarter. The premium EV segment overall is navigating the choppy waters better than other EVs. JD Power on Thursday said that EVs have made up 26.4% of premium vehicle sales so far this year, down only five percentage points from last year. Meanwhile, share in the mass market has been cut in half to 1.9% from 4%. 

Premium EVs, like the BMW i5, have been selling well even amid the policy-induced EV downturn.

It’s a completely different story on the secondhand side of the EV market. Used EV sales also peaked in Q3 as consumers anticipated the premature end of tax credits. But they did not drop off nearly as hard as new EV sales did, and the market is already growing again. 

Cox says that Americans snapped up 93,500 used EVs in Q1. Sales were up 17% from Q4 and up nearly 12% from the first quarter of 2025. Market share hit roughly 2.1%. But remember that the market for used cars in general dwarfs the new-car market.

“While the market remains small, the trajectory is what stands out,” Valdez Streaty said. That’s due to a broader variety of used models hitting the market. While a few years ago buyers on a budget were mainly choosing between Chevy Bolts, Nissan Leaf hatchbacks, and Tesla Model 3s, now the selection includes discounted BMWs, long-range Hyundais, and more.

Prices are more attractive than ever too. Per Cox, 44% of used EV transactions in February landed below $25,000. The used market has flipped on its head, and now you get more bang for your buck in an EV than in a combustion vehicle.

According to research from Recurrent, which tracks the used EV market, the average used EV between $20,000 and $30,000 has roughly 33,000 miles on the clock and is a 2022 model. Combustion vehicles at that price tend to have nearly 50,000 miles and be a year older. 

Used EV supply should grow thanks to the wave of off-lease EVs we’ve been hearing about for months. Cars people got through the Inflation Reduction Act’s so-called “leasing loophole” are just now starting to come back to dealerships. Over the next year, Cox projects that the number of lease returns per month will steadily rise to 240,000, with about 20% of those, or almost 50,000 cars, being electric. 

Another factor that could drive even more demand for used EVs? You guessed it: high gas prices. While $4 a gallon gas probably won’t bring the EV market back to pre-incentive glory or help sell a lot of Rivian R2s, it could certainly push a few more cost-conscious buyers into $20,000 Model Ys. 

Contact the author: Tim.Levin@InsideEVs.com