[RahulNagaraj]

According to a study by JD Power, there will be a massive increase in the number of used electric vehicles in the market in 2026.

The data shows that the leases of a whole lot of EVs are due to expire in 2026, leading to a number of affordable EVs being available in the market. The sudden increase is thanks to a loophole in the revised IRS clean vehicle tax credit.



As per reports, the tough new battery sourcing rules and the requirement for final assembly to be done in North America have made fewer EVs eligible for the tax credit. However, a loophole considers a leased vehicle to be a commercial sale, making a leased EV eligible for the full $7,500 incentive, which can be subtracted from the price of the EV during the time of sale. This, paired with the fact that there is no price cap or income cap on the buyer while buying an EV, makes it a more tempting idea than an outright purchase.

Reports state that 43% of all EVs from major brands (including Tesla, Lucid, Rivian & Vinfast) have been leased, both in 2023 and the first three quarters of 2024.

This brings us to JD Power, which states that while it expects a 2% drop in the number of used EVs in 2025, there will be a massive 230% increase in used EVs in 2026. This is because as many as 215,000 cars end their leases. The study also states that new EV prices are also getting cheaper. The average price for a new electric compact SUV is now $35,900 - a little under $13,000 less than the price of the same class of vehicle in 2022.

Source: ArsTechnica

Link to Team-BHP news