The market of EVs has suffered a rough year. With the declining federal aid to the stagnating new-car sales, the industry appears to be passing through a rough phase. However, in this state of indecision, there is a small sector of the EV market that is performing well, the used market. Reports on the market intelligence by Edmunds reported that used electric vehicles were selling faster than any other type of car in the U.S. in the third quarter of 2025, compared to gasoline, diesel, hybrid, and plug-in hybrid cars.
A Surprising Bright Spot
New EV sales declined in October after the expiration of the federal tax credit of $7,500 dollars federal and an effective revocation of fuel-economy standards, but used EVs sold more rapidly than ever. According to Edmunds, the average EVs aged 3 years spent only 34 days in dealer lots in Q3, versus 43 days in the case of gasoline, 47 with plug-ins, and 40 with traditional hybrids.
What’s driving this surge? Affordability. The median used car is currently selling at a record price of more than $31,000, an increase of 5 percent a year, and the median three-year-old used EV is priced at less than $30,000 – and commonly has less than 35,000 miles on its odometer. These used EVs constitute great value to price-sensitive buyers who are experiencing the pain of high interest rates and inflation. Considering most 8 out of 10 EVs retain over 90% battery health. It’s no wonder it’s popular.
Depreciation Becomes a Selling Point
The used EVs are also a story of huge depreciation. The pioneers of electric vehicles frequently took heavy losses since the new models with longer range and advanced technology led to the unpopularity of the older models. That fast obsolescence is now playing in favor of buyers.
In the case of Tesla Model S, it sold in only 21 days last quarter at an average price of $44,621, about $70,000 below its initial MSRP. The Model 3 came next, with 24 days at an average sale of $24,447, and the Model Y with 26 days and $27,624. Other EVs that are sold quickly are the Hyundai Ioniq 5 ($23,964), the Ford Mustang Mach-E ($26,920), and the Kia EV6 ($24,447).
To a number of shoppers, these prices lead to high-end technology – long range, fast acceleration, and high-quality infotainment all at a fraction of the expense of new models. According to Edmunds, buyers of used EVs are accepting a technology only a single generation old, and the buyers of new EVs are still having to pay top dollar on models that are changing at a very rapid pace.
The Lease Return Wave
The other driver of this boom is the influx of off-lease EVs in the market. In the last several years, manufacturers relied on leases the most to sell electric models, making deals with federal credit and intensive incentives. All these leases are going out of service, and this is flooding the used market with low-mileage vehicles that are well-maintained. Another Interesting news is that Tesla starts renting cars amidst the US demand falls.
The influx is a big consumer boon and possibly a boon to automakers as well. A robust used EV market is beneficial in strengthening the brand confidence and enhancing long-term residual values. However, there is a twist to it: manufacturers cannot continue subsidizing leases in the long term.
Numerous EVs have been leased at lower than market rates in order to encourage adoption, and with such policies expiring, businesses are pressured to ensure that they create new models at a cheaper cost to manufacture and sell profitably.
