Q1 2026: New EV Sales Plummet 28%, Used EVs Climb 12% to Record Highs

Bassyonni

Published: March 29, 2026 8:18 AM ET

Q1 2026: New EV Sales Plummet 28%, Used EVs Climb 12% to Record Highs

The US electric vehicle (EV) market has experienced significant shifts in the first quarter of 2026. New EV sales dropped sharply by 28% year-over-year, while used EV sales surged by 12%, reaching unprecedented levels. This divergence highlights the impact of the expiration of the federal tax credit on consumer purchasing behavior.

New EV Sales Decline

During Q1 2026, 212,600 new EVs were sold, a notable decline from 296,304 units in Q1 2025. This drop has resulted in the EV market share falling to approximately 5.8% of total new vehicle sales. This decline mirrors the same percentage from Q4 2025 and is significantly lower than the peak of 7.5% in Q3 2025.

The expiration of the $7,500 federal EV tax credit on September 30, 2025, has had a pronounced effect. The One Big Beautiful Bill Act ended the purchase credit, contributing to a surplus of EV inventory. Currently, the average inventory for new EVs stands at 130 days, much higher than the 89 days for combustion vehicles.

As a result, automakers are compelled to provide incentives to stimulate sales. By February, average transaction prices for new EVs had decreased to $55,300, which now holds a slight gap of $6,500 compared to gas-powered cars.

Tesla and Market Dynamics

Tesla, the leading seller in the US EV market, delivered an estimated 122,196 units in Q1, marking a 4.6% decline from the previous year. In contrast, total new vehicle sales across all segments fell by 6.5%, totaling 3.67 million units.

Used EV Market on the Rise

In stark contrast, the used EV market has witnessed robust growth. There were 93,500 used EVs sold in Q1 2026, increasing from 83,587 units in Q1 2025 and up 17% from the previous quarter. The average price for used EVs now stands at $34,821, which places them just $1,300 above the average price for used gas vehicles ($33,487). This marks a significant shift from a gap of over $10,000 earlier in 2023.

Used EV sales in Q1 2026: 93,500 units
Average price of used EVs: $34,821
Average price of used gas vehicles: $33,487

The supply of used EVs is also managing well, with a days’ supply of 42 days, closely aligning with the 38 days reported for traditional gasoline vehicles. This indicates strong consumer demand rather than an overabundance of supply.

Future Predictions and Market Outlook

The outlook for 2026 indicates continued pressure on new vehicle sales, with projections estimating a decline to 15.8 million total sales. Lease returns are expected to become increasingly influential, with significant volumes anticipated in the coming years due to leases established under previous tax incentives.

As these EV lease returns hit the market, they could further bolster the used EV segment, providing consumers with competitive pricing and high-quality options for electric driving.

The current landscape presents a paradox: while the overall EV market faces challenges, the rise in used EV sales could indeed lead to a greater acceptance of electric vehicles among consumers in the future.