Summary
- Nearly 280,000 EV leases will end in the next two years in the United States
- Returning lease volumes for EVs are projected to spike by 230% in 2026
- Prices for new zero-emissions cars are expected to decrease due to more models from various automakers
- Most returning lessees are likely to lease a new EV instead of buying out their old vehicle
- Average buyout price for electric compact SUVs is higher than the threshold for the used EV tax credit
Article
The Rise of Used Electric Vehicles in the US
In the next two years, the United States will see a surge in the number of electric vehicles (EVs) returning to the market as their leases come to an end. According to a study by J.D. Power, nearly 280,000 EV leases will be ending by 2026, leading to a significant increase in the availability of used EVs. This influx of off-lease EVs is expected to result in more affordable options for consumers looking to purchase an electric car.
Impact on EV Prices
With a large number of off-lease EVs entering the market, the prices of both new and used electric vehicles are likely to be affected. The availability of used EVs will give buyers more choices and potentially lower prices in the used car market. At the same time, the introduction of more affordable models by automakers is expected to drive down prices for new EVs as well.
Lease Trends and Purchase Decisions
The trend of leasing electric vehicles has been on the rise, with a significant increase in lease volumes observed over the past few years. J.D. Power’s E-Vision Intelligence Report highlights a 355% surge in new EV lease volumes in 2023, followed by an 88% increase in September 2024. As more EV leases come to an end, lessees will have to decide whether to buy out their existing vehicle or lease a new one, considering the prices and incentives available in the market.
Cost Analysis for Lessees
The decision between buying out an off-lease EV and leasing a new one will depend on factors such as residual value, lease payments, and tax credits. For many returning lessees, it may be more cost-effective to lease a new EV rather than purchase their existing vehicle. The availability of tax credits for used EVs could also influence the decision-making process for lessees.
Market Uncertainty and Future Trends
Despite the current trends favoring the availability of more affordable EV options, there is uncertainty surrounding the future of tax credits and incentives for electric vehicles. Changes in government policies could impact the market dynamics and consumer behavior in the coming years. As more people show interest in EVs for their next vehicle purchase, the market is poised for further growth and evolution in the electric vehicle segment.
Conclusion
In conclusion, the next two years will witness a significant shift in the availability and affordability of electric vehicles in the United States. With a large number of EV leases ending, consumers will have more options to choose from in both the new and used car markets. The decision to lease or buy out an off-lease EV will depend on various factors, including pricing, incentives, and tax credits. As the demand for electric vehicles continues to grow, the market is expected to see further developments and changes in the years to come.
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