Used EV interest climbs while gasoline prices rise

Rising gasoline prices tied to tensions in the Middle East are sparking renewed interest in used electric vehicles, even as broader consumer sentiment declines, according to first-quarter data presented Tuesday by Cox Automotive and its wholesale unit Manheim.

U.S. average gasoline prices climbed through March, reaching $4.11/gal as of Monday, up about 38% since the conflict in the Middle East began, Cox said. Over the same period, consumer sentiment declined about 6%.

Even so, consumer spending has remained resilient, supported in part by a strong tax refund season. Weekly spending has been positive most weeks this year, with the four-week moving average recently approaching 4%, its highest level in the past year.

Used EV sales strengthened in the first quarter following a slowdown late last year after federal tax credits expired. At Manheim auctions, EV sales rose nearly 39% year to year to about 37,000 units, representing a record 3.6% share of total volume.

In the retail market, used EV sales exceeded 100,000 units in the quarter, up 20% from a year earlier and the highest quarterly total on record.

Cox said the gains reflect both greater supply and increased online shopping activity. A growing number of off-lease EVs is entering the market, expanding selection and offering lower prices relative to original sticker values. Cox reported increased interest in EVs as fuel prices moved higher but cautioned that sustained increases in gasoline prices – typically for six months or longer – are needed to materially shift purchasing behavior.

Used EV pricing also strengthened in March. The Manheim EV index rose 7.9% year to year, accelerating from modest gains earlier in the quarter. Both EV and non-EV valuation indexes have increased more than 7% so far this year, with the EV measure recently edging past its non-EV counterpart.

At the same time, supply conditions are tightening across the used-vehicle market. Total inventory fell below 2 million units at the end of March, the lowest level on record, while days’ supply declined for eight consecutive weeks. While still higher than other powertrains, EV supply has dropped sharply, with days’ supply down 34% year to year to just under 30 days.

Retention values for used EVs have also improved. Three-year-old EVs retained 52.7% of their original value as of late March, up nearly 12 percentage points from a year earlier, marking a recovery after steep declines in prior years.

Looking ahead, the supply of used EVs is expected to expand further as lease maturities rise. EVs are projected to account for about 12% of lease returns in 2026, up from roughly 5% in 2025, reflecting higher leasing volumes in years when federal incentives were in place.

Allegra Fradkin, afradkin@opisnet.com