Leasing helped boost EV adoption in the U.S. over the past few years. Incentives, especially federal tax credits that applied more broadly to leased vehicles than purchases, helped to lower monthly outlays and drove car shoppers toward short-term leases. Now, those two- and three-year leases are beginning to expire, sending a wave of used EVs back into the market. The problem – at least for automakers – is that those vehicles are worth much less than predicted. A three-year-old EV retained about 40% of its original value at auction by the end of 2025. In early 2022, comparable vehicles held roughly 90% of their value, says Cox Automotive.
Tesla sees the most EV leasing volume and will likely see the biggest fallout, followed by GM, Hyundai-Kia, Volkswagen Group, Ford, and Honda. Finance companies are working with dealerships and auction platforms to move vehicles as quickly as possible to lessen losses. Some are even toying with direct-to-consumer sales or new certified pre-owned leasing programs to increase demand.
Dealers say there is still demand. Lower upfront costs compared with new EVs, combined with improving transparency on battery life, are helping attract buyers.
Source: Auto Week
