For years, Tesla CEO Elon Musk has promised that his EV company would finally manufacture an affordable car in the $25,000 range. For years, he has missed his own deadlines … until now? Step into a showroom run by EV Auto, an electric car dealership with three locations in the US states of Utah and Colorado, and you can choose from several Model 3s all hovering around the $20,000 mark.
The catch? These cars have at least several thousand miles on them—because they’re used.
Some global EV makers aren’t in a great spot. But for buyers, it’s a great time to pick up a used electric car. Time has proven that even older batteries and motors are reliable. Federal tax credits meant to boost EV sales for years will expire this fall. Plus, the cars are relatively affordable. More than a third of the used electrics available right now are under $25,000, according to data collected by Edmunds and the startup Recurrent; more than half come in under $30,000. These are price points nearly unheard of in the American new car market—gas-powered cars included.
Now, electric-curious buyers long locked out of the zero-emission car market by fears about battery packs, range, and high prices seem to be inspired by a better selection of newer EVs. Recurrent data suggests that used electrics have been more in demand than gas-powered ones in five of the last seven months. (Even Teslas are moving off lots at a clip, despite a global movement that has protested Elon Musk by targeting his car company and its customers.)
The Clock Is Ticking
Buyers are facing a deadline. A federal tax program offers qualified purchasers up to $4,000 off a used electric vehicle that costs $25,000 or less. But the One Big Beautiful Bill, signed into law by President Donald Trump earlier this month, moved those credits’ expiration date from the end of 2032 to the end of this September.
The changes are obvious at EV Auto, says CEO Alex Lawrence. “It’s a bit chaotic right now,” he says. “As we get closer to September 30, it’s probably going to be even busier.”
In a twist, the news of the credits’ end seems to have brought late-breaking attention—and an opportunity for more price-sensitive buyers to get into an electric car. Brent Gruber, who directs the JD Power Electric Vehicle Experience, says the opportunity could be particularly exciting to younger, Gen Z car buyers, who surveys suggest are interested in driving climate-friendlier EVs but who don’t always have the money to buy one. “Used electric vehicles present a really great opportunity to jump into the EV pool,” says Gruber.
Anyone thinking about venturing into used electrics “should start doing your research and calling around now,” says Liz Najman, the director of market insights at Recurrent. The used EV tax credits apply only to certain vehicles—those that cost less than $25,000 and are model year 2023 or earlier—and there are only so many of those vehicles on the roads. The longer buyers wait, she says, the less selection. But those buying now will still find good deals, especially because dealers are working to keep cars under that $25,000 point. “A two-year-old used EV will have all the bells and whistles but at two-thirds of the price,” she says.
EV Battery Longevity
For years, buyers have been nervous about used electrics, mostly because they didn’t know how the vehicle’s heavy, powerful, and expensive-to-replace batteries would last over time. Consumers understand from their phones that batteries degrade, cutting into the already-dear range of battery-powered cars. But battery performance seems to have surprised even some auto manufacturers. Recurrent has found that 2011 EVs—cars that could be in high school—still get 79 percent of their original range; on average, 2020 EVs still get 97 percent of their original range.
For those not quite ready to get onboard with EVs, another used electric buying window will likely open next year and stay open for two years or so. The reason also has to do with fallout from the yanking of federal support for electric cars.
For three years now, those wanting to try out electrics have been able to take advantage of a federal leasing “loophole” that gives car companies $7,500 tax credits for new EVs, savings they pass on to new leaseholders. This loophole has made it cheaper to lease electric—and has also been closed by the new bill. Still, those leaseholders will likely turn in some 215,000 used electrics next year, according to JD Power. Leaseholders, who face penalties if they damage or put too many miles on their cars, tend to take good care of their vehicles. That suggests large numbers of used EVs in great shape are heading to dealerships soon.
Still, the future of used EVs will be messy. Automakers are still working out how higher tariffs will affect new car prices; upward pressure on those will likely push up used car prices, too. Dealers, meanwhile, might increase prices on some of their used EVs once the tax credit’s $25,000 ceiling is no longer there.
The market might bifurcate, says Lawrence, the dealer, with older EVs available for less than $20,000 and newer ones climbing higher. “It’s going to be weird,” he says.
