Electric vehicle resale values are poised for a sharp decline as a flood of lease returns hits the used market. Cox Automotive warns that over 1.1 million leased EVs will become available creating a supply glut that could devastate values for current owners. This reversal follows years of strong EV resale performance driven by limited supply and high demand.

Several factors are converging to accelerate depreciation. The expiration of the $7,500 federal tax credit in September 2025 led dealers to offer aggressive lease deals, with nearly half of all EVs on the road now being leased. As these 36-month leases mature starting this April, the market will face unprecedented supply pressure. Meanwhile, rapid battery technology improvements make newer models increasingly attractive, further eroding demand for older vehicles.

For EV owners, timing is critical. Industry analysts recommend selling now before the market correction fully takes hold. Models like the Ford Mustang Mach-E, Tesla Model Y, and Volkswagen ID.4 are expected to be hit hardest by the coming depreciation wave. While gasoline vehicles may see their used values rise due to relative scarcity, electric vehicles face a perfect storm of oversupply and diminishing consumer appeal.