EV market faces a glut
A surge in EV leasing — driven by recent federal tax credits — has created a flood of used electric cars that’s improving affordability for second‑hand buyers but cooling new‑car demand. At the same time, shifting regional policies from the UK to Indian states (Karnataka’s new lifetime levy vs Maharashtra’s ₹12 crore incentives) and lost federal credits in places like New Jersey are making adoption and dealer strategies more volatile. (autonews.com) (livemint.com) (auto.economictimes.indiatimes.com) (njbia.org)
Industry analysts now estimate the U.S. will see more than 300,000 off‑lease EVs return to the used market in 2026, up from roughly 123,000 in 2025 and with projections reaching about 650,000 by 2027. (cdkglobal.com) (news.dealershipguy.com) Quarterly sales data show new EV deliveries fell roughly 28% in Q1 2026 to about 212,600 units while used EV transactions rose about 12% to roughly 93,500 units, tightening price gaps with comparable gasoline cars. (electrek.co) (recurrentauto.com) Leasing behavior concentrated the future supply: Experian reported more than half of new EV transactions were leases in late 2024, and Cox/industry analysis pegged EV lease share as high as 67% by March 2025, creating a concentrated cohort of near‑new off‑lease returns. (experianplc.com) (news.dealershipguy.com) Wholesale operators are already adjusting: Manheim’s data indicate EVs accounted for roughly 5% of lease maturities in 2025 and are expected to rise to about 12% in 2026, shifting auction velocity and valuation patterns. (coxautoinc.com) Policy swings are adding regional volatility — Karnataka has scrapped its blanket EV road‑tax exemption and imposed a one‑time graded lifetime levy of 5% for EVs up to ₹10 lakh, 8% for ₹10–₹25 lakh and 10% above ₹25 lakh, a change the state estimates will raise roughly ₹259 crore annually. (cnbctv18.com) (news18.com) At the same time, Maharashtra approved about ₹11.7 crore in emergency incentives to clear delayed subsidy payments for EV manufacturers, while in the U.S. the expiration of federal EV tax credits (ended Sept. 30, 2025) coincided with reports that EV market share slipped — New Jersey’s EV registrations were 12.2% in 2025 but down about 1.82% from 2024. (auto.economictimes.indiatimes.com) (technologyreview.com) (njbia.org)
