Bargain Car Hunters Drive Next Wave of US EV Sales

Sales of new electric vehicles continued to slump in the first three months of the year. But there’s one growth segment: A new batch of relatively cheap and used battery-powered vehicles are enticing buyers looking for bargains.

US drivers bought 216,399 battery-powered cars and trucks from January through March, a 27% decline from the year-earlier period, as buyers continued to balk at purchasing electric machines without federal purchase incentives worth up to $7,500, which expired in September.

However, relatively affordable EVs continued to zoom out of dealerships, and sales of used models surged by 20% compared to the first quarter of 2025, as a crowd of Americans tried to do an end-run around volatile gas prices, according to Cox Automotive.

“This is not climate activism or early-technology adopters any longer,” said Jimmy Douglas, founder of Plug, a startup that sells used EVs wholesale to car dealerships. “Now, for many Americans, an electric vehicle is the most compelling vehicle they can afford.”

The EV Group, a used electric car dealer with stores in Tennessee and Utah, saw demand tick steadily higher. It’s seen an even bigger spike in March following the US and Israel attacks on Iran. The company tried to source as much inventory as it could, but still could have used more machines, according to owner Alex Lawrence.

“There’s a direct connection between gas prices and EV sales; it doesn’t take a genius to figure it out,” he explained. “We are seeing a lot of people with gas guzzlers to trade in.”

Plug is seeing dealerships are getting into bidding wars over used EV inventory. In the first quarter, every EV on its digital platform drew 14 bids on average, double the traffic a year ago, according to Douglas, and cars were often snapped up before they arrived at dealerships.

“We are living in a monthly payment environment, so it doesn’t take that long for people to change their behavior,” Douglas said. “Consumers are looking at the total cost of ownership in a whole new light. And they’re moving fast.”

Used electric cars are nearly at price parity with pre-owned gas cars, and they tend to be newer machines with fewer miles. That’s helped make used EVs the fastest-selling of any category of car.

Douglas isn’t alarmed by the swoon in new EV sales either; he said thousands of consumers rushed to buy an electric car before federal subsidies expired in September, pulling forward up to six months of demand.

Now, the U.S. EV market is stabilizing, in part thanks to new models priced at or below $45,000, according to Cox. Stephanie Valdez Streaty, Cox director of insights, said EV adoption now depends on more affordable cars and trucks, and charging infrastructure, which is expanding quickly in the U.S.

“Those longer-term fundamentals continue to support EV growth,” she said. “The timeline has shifted, but the direction hasn’t.”

Indeed, Tesla Inc.’s Model Y, the most-popular EV in America notched a 23% increase in first-quarter sales, compared to the year-earlier period. Toyota Motor Corp. saw demand nearly double for its bZ, an electric SUV that starts at $43,000, a price well below the average price of a gas-powered car these days. And Americans snapped up almost 10,000 of Hyundai Motor Co.’s Ioniq 5 in the first quarter, a 14% increase from a year ago.

Bert Tyler, a retiree in the suburbs of Philadelphia, bought a new Chevrolet Bolt in March, in part because it costs him just $6 to charge fully, compared to the $40 it took to fill up his Volkswagen AG Golf, “and that was before the current gas spike,” Tyler said. Starting just shy of $27,000, the Bolt is one of the cheapest cars on the U.S. market — gas or electric.

“My wife and I are basically poster children for who would be happy in an EV,” said Tyler, whose longest drive is to his curling club — 70 miles roundtrip.

Thanks to cheap models like the Bolt, the average transaction price for an EV in March was just $5,800 more than that of a gas-powered vehicle, the thinnest gap on record, according to Kelley Blue Book.

Even if gas prices fall, economists say the war in the Middle East and its impacts will be a tailwind for EVs for some time.

“Overall, the skepticism on the EV segment is all but gone,” said Steve Renard, executive manager of Infiniti of Tacoma at Fife. “Now, it’s not that difficult to show an EV to a gas customer; that never used to happen.”

Top photo: Used vehicles for sale at a CarMax location in Fremont, California, on Monday, Aug. 19, 2024. Photographer: Bloomberg/Bloomberg.