Used-EV market ramps up as tax credit end looms

Sales of used electric vehicles are ramping up as it becomes more likely the federal EV tax credit will end and as off-lease EVs return to market.  

Second-quarter used EV sales are projected to surpass 100,000 units, setting a record and following a 32.1% year-over-year jump in May to 36,609 units. By contrast, new-EV sales declined 10.7% YoY in May to 103,435 units. 

With strong sales, used EV supply has diminished, reaching a three-year low in May. Used EV inventory was 40 days’ supply in May, down 11% YoY, according to Cox Automotive.  

Uncertainty surrounding the fate of the federal tax credit for new and used EVs is one driver behind consumer demand in recent months, combined with state-level incentives. 

Meanwhile, tariffs and the resumption of student loan payments and credit bureau reporting could impact auto loan credit performance in the coming months.  

In powersports, mixed sales and rising inventories have prompted a wave of promotions from manufacturers that range from increased cash rebates to lowered rates on certain models.  

In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends in electric vehicles, credit performance and powersports for the week ended June 27.