Gas prices aren’t the only factor fueling used electric vehicle sales

The latest electric vehicle sales data presented a bleak picture – at least for new electric vehicles. Sales of new electric vehicles took a hit in the first quarter, falling about 28% year over year after the Trump administration eliminated the $7,500 consumer tax credit, according to Cox Automotive.

Used electric cars are moving in the opposite direction. Two accelerators have been combined to increase those sales.

Used electric vehicle sales in the first quarter rose 12% compared to the same quarter last year, according to the same Cox Automotive report. There is a bit of momentum in the shorter term as well; Used electric vehicle sales rose 17% between the fourth and first quarters.

The high cost of gas — the average price is above $4 a gallon — has helped spur interest in and sales of electric vehicles. But there’s another factor at play here as consumers look for more affordable options: an abundance of expiring leases, the Financial Times reports. EV leases were a popular option in early 2020, and now that they’ve expired, hundreds of thousands of pre-owned EVs are entering the market. And consumers are ready for them.

By the end of the year, electric vehicles will make up 15% of all non-lease vehicles, double the 7.7% in the first quarter, the Financial Times reported.

The old economic principle of supply and demand has remained constant. The rise in the number of used cars helped push prices down, giving those sales an extra boost. This has led to price parity – or close to it – with internal combustion vehicles. According to Cox Automotive, the average price of a used electric vehicle is $34,821 compared to $33,487 for the gas engine equivalent.