February 24, 2026 - Cheap Used EVs On the Way

This is the Telemetry Transportation Daily for February 24, 2026, and I'm Sam Abuelsamid, Vice President of Market Research for Telemetry.  

The passage of the Inflation Reduction Act in 2022 led to substantial changes for federal tax incentives toward electric vehicle purchases in the U.S. The previous system that allowed every automaker to be eligible for tax credits of up to $7,500 on the first 200,000 EVs sold was scrapped. The program allowed the same credits, with no sales cap through 2032, but only for vehicles assembled in North America that had batteries that met certain domestic content requirements and were sold under a price cap and with income limits for the purchaser. This eliminated eligibility for many imported EVs, but automakers found a workaround. Another clause in the law allowed credits for commercial vehicle sales with no domestic content requirements. 

Starting with Kia, automakers realized that leases could be counted as commercial sales since the vehicles are technically sold to the financial institution that leases the vehicle to the consumer. The tax credits were then passed through to consumers in the form of lower monthly payments. Until the entire incentive program was cancelled by the Republican-controlled Congress as of September 30, 2025, hundreds of thousands of EVs were leased at unusually low rates. In states like Colorado, which also offered a $5,000 incentive, some EVs were available for as low as $10/month for the base Nissan Leaf and $0/month for the Fiat 500e. Even in California, models like the Hyundai Ioniq 5 were offered for about $150/month. Many of these vehicles will be coming off-lease in the coming months and hitting the used car market with relatively low mileage. 

These vehicles will have as much as 8 years and 80,000 miles left on the battery warranty and even a year or more on the overall vehicle warranty. Consumers who are interested in trying out an EV will have the opportunity to buy one that is practically new at a fraction of the original sticker price and with relatively low risk. This could have a positive long-term impact on the EV market, as most people who buy an EV end up wanting to stay electric, and this could lead them to purchase a new EV in the coming years as they are ready to replace these used models. With EV charging infrastructure continuing to improve, the EV ownership experience is expected to improve. 

Thanks for listening.