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March 20, 2025 – After three years of steady decline, the price of used electric vehicles (EVs) in the United States is climbing again, according to new market data. A combination of limited inventory, surging consumer interest, and shifting policy incentives is driving the rebound, ending a prolonged period of depreciation that had made second-hand EVs a bargain for shoppers.
Industry data shows that used EV prices rose 2% year-over-year in February 2025, marking the first annual increase since 2022. The trend is not isolated to EVs — all used car segments are seeing gains, with hybrids up 1.5% and traditional gasoline and diesel vehicles up 1.1%. However, the magnitude of the EV price recovery is notable given that the segment had experienced the steepest drops in recent years.
The average price of a 2023 model-year used EV in the US now stands at approximately $29,800, according to estimates from Kelley Blue Book and Cox Automotive. That is roughly $4,500 less than the average price of a comparable gasoline-powered model, a narrowing gap that reflects improving demand for electrified vehicles. In 2023, the same comparison showed a discount of nearly $8,000.
“We’re seeing a clear inflection point in the used EV market,” said Jonathan Smoke, chief economist at Cox Automotive. “The combination of limited supply of newer used EVs and strong consumer pull from lower gas prices and federal incentives is pushing prices higher. It’s a reversal from the oversupply situation we saw in late 2023 and early 2024.”
The shift is driven by multiple factors. First, the supply of off-lease and trade-in EVs has tightened as automakers slowed production of some models and as fewer new EVs were sold during the 2022–2023 chip shortage. Second, the federal tax credit of up to $7,500 for new EV purchases under the Inflation Reduction Act has boosted new EV sales, which in turn raises the pool of newer used EVs, but those are taking longer to reach the market. Meanwhile, rising consumer awareness and lower fuel costs have kept demand for used EVs robust.
New EV registrations in the US hit a record share of 25.3% of the total new car market in the 12 months ending February 2025, surpassing hybrids for the first time. In February alone, more than 96,000 new EVs were registered, representing a 12% year-over-year increase. The momentum is partly attributed to the introduction of more affordable models, such as the Chevrolet Equinox EV and the refreshed Tesla Model 3, which have widened the buyer base.
However, the price of a used EV still carries a significant discount compared to similar gasoline-powered vehicles. On average, a used EV is 10.7% cheaper than a comparable gasoline car, down from a 13.5% discount in late 2024. The gap has narrowed as EV values firm up. In 2022, used EVs commanded a 29.4% premium over gasoline models, but that premium flipped to a discount by mid-2024 as inventory glut forced prices down.
The regional picture is mixed. West Coast states like California, Oregon, and Washington — where EV adoption is highest and state-level incentives remain strong — are seeing the fastest price recovery. In contrast, Midwest and Southern markets, where charging infrastructure is still developing, have experienced more modest gains.
“The used EV market is becoming more nuanced,” said Stephanie Valdez-Streaty, director of industry insights at Cox Automotive. “Buyers are now more educated about battery degradation, warranty coverage, and eligibility for the used EV tax credit of up to $4,000. That’s making them more comfortable paying a premium for well-maintained, newer models.”
One notable policy factor is the IRS’s recent clarification on the used EV tax credit eligibility, which allows buyers to transfer the credit to dealers at the point of sale. This has made transactions smoother and boosted demand for qualified vehicles. The tax credit applies to used EVs priced under $25,000, which has put upward pressure on the lower end of the market.
Dealers across the country report that inventory of pre-owned EVs under $25,000 is moving quickly. “We can’t keep a 2021–2022 Model 3 or Bolt on the lot for more than a week,” said Mark Allen, a used car manager in Houston, Texas. “People are coming in specifically for the tax credit, and they’re willing to pay closer to retail price than they were six months ago.”
Looking ahead, analysts expect moderate price increases to continue through the second half of 2025, though the pace may slow if new EV production ramps up further and more off-lease vehicles enter the used market. The average age of
