EV cars are holding up better than expected

It’s not often that timing lines up so perfectly in the car market, but right now, used electric vehicles (EVs) are offering a golden opportunity in the US.

With a blend of falling prices, surprisingly solid battery performance, and a federal tax credit that expires soon, now might be the best time to take the electric plunge.

EV cars are holding up better than expected

For years, Tesla CEO Elon Musk has talked about creating a $25,000 electric car. While that hasn’t exactly panned out in the new car world, on the used lot, it’s becoming a reality. Take a stroll through EV Auto, a dealership chain with locations in Colorado and Utah, and it is easy to spot several used Model 3s going for just around $20,000.

There’s a catch, of course, these cars are pre-owned and come with thousands of miles on the clock. But the used EV market is booming for a reason; these cars are holding up better than many expected.

A growing number of used electric vehicles now sit comfortably below $25,000. In fact, over a third of them are under that price point, and more than half are under $30,000, according to data from Edmunds and Recurrent an EV data startup. In the current auto market, where even modest new gas-powered cars often exceed $30,000, that’s a breath of fresh air.

Interestingly, buyers are responding. Data from Recurrent shows that in five of the last seven months, used EVs have been outselling used gas cars. That’s despite all the noise surrounding Tesla and protests aimed at CEO Elon Musk. The reality is, customers are starting to warm up to the idea of affordable, clean transportation.

But there’s urgency now. A federal program currently offers up to $4,000 in tax credits to buyers purchasing a used EV priced at $25,000 or less. That benefit was supposed to last until 2032.

However, after President Donald Trump signed the new One Big Beautiful Bill, the program’s end date has been moved up to the end of this September.

Gen Z and first-time EV buyers in the US may need to take note now

For younger buyers, especially Gen Zers trying to go green without breaking the bank, this is a chance that may not come around again soon. Brent Gruber from JD Power says this is a crucial moment for these drivers to access climate-friendly cars without paying a premium.

Liz Najman of Recurrent agrees. She advises prospective buyers to start looking now and not delay. The tax break only applies to models made in 2023 or earlier and priced below $25,000. Supply is limited, and waiting too long could mean slim pickings. Najman points out that a two-year-old EV will likely have modern features but cost just two-thirds of the original price.

One of the biggest concerns that keeps people away from used EVs is the battery, how long it lasts, how it performs, and how expensive it is to replace. But real-world data is reassuring. Recurrent found that EVs from as far back as 2011 still retain 79% of their original range. Even 2020 models average about 97%. That’s better than many buyers and automakers expected.

If you’re not quite ready to jump in before the September deadline, another opportunity might be on the horizon. For the past three years, leasing an EV came with a loophole, $7,500 in tax credits that made leasing cheaper. That loophole, too, is ending. But those leased EVs, often well maintained, will begin hitting the used market next year, roughly 215,000 of them, according to JD Power.

So while the current tax credit may be sunsetting, the next two years could bring another crop of good-quality used electrics into circulation.

The future of the used EV market won’t be simple. With rising tariffs and changing incentives, new EVs might get more expensive. That, in turn, could push up used prices too. Dealers may also lift prices once they no longer need to stay under the $25,000 threshold for tax credit eligibility.

Alex Lawrence, CEO of EV Auto, predicts a split market: older EVs under $20,000 and newer models climbing higher. “It’s going to be weird,” he says, but also full of potential for savvy buyers.