Used EV values have fluctuated amid uncertainty over tax credits and potential tariffs.
“For the used EV market, if you want to describe it in one word right now, it’s ‘volatile,’” Paul Fortin, co-founder and head of automotive products at Exponential Markets, told Auto Finance News.
“The reason it’s volatile is that the overall -car market right now is also volatile. There’s uncertainty with macroeconomic variables, there’s uncertainty with industry variables, and there’s a normal volatility that exists,” he said.
In the short term, with talk of federal tax incentives being eliminated, consumers are rushing to purchase a used EV or lease a new one before the incentives are removed, Fortin said.
In January, used EV sales increased 30.5% year over year, reaching 26,933 units, while the supply of used EVs tightened to 45 days’ supply, down 23.3% YoY, according to a Feb. 20 report by Cox Automotive.
Meanwhile, after declining in January, the Exponential Electric Vehicle Index, measuring wholesale prices of used EVs and inventory awaiting sale, landed at 91.88 as of Feb. 20, up 1.6% year to date, and 4.2% YoY.
“In the short term, you have these forces that are pushing values up,” Fortin said. “On the longer term, you have these forces that are pushing [values] down.”
During this special episode of the “Weekly Wrap,” podcast, Auto Finance News Associate Editor James Van Bramer discusses used EV price volatility with Exponential Markets’ Fortin.
Subscribe to “The Roadmap Podcast” on iTunes or Spotify, or download the episode.
Auto Finance Summit East 2025 is set for May 12-14 at the JW Marriott Nashville featuring fireside chats with Santander Consumer USA and Chase Auto. Visit autofinance.live for more information. Early-bird registration is available here.
Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain.
Hello everyone and welcome to The Road Map from Auto Finance News, the nation’s leading newsletter on automotive lending and leasing since 1996. Today, we have a special edition where I’m joined by Paul Fortin, Co-founder and Head of Automotive Products at Exponential Markets. Today, Paul and I will discuss the used EV market and the various factors that will play into valuations in 2025.Before we get started, I’d like to share some key background points. Though there are plenty of headlines to choose from when it comes to EVs and the automotive industry, the new presidential administration has halted state investments in public EV charging stations and proposed ending EV tax credits. Those credits include a $7,500 rebate on new EVs, which drove EV leasing up substantially last year. The used EV credit also offers a $4,000 rebate on used EVs priced at or below $25,000.
Tariff proposals could further disrupt the market. Wolfe Research, an independent firm, found that Trump’s tariffs would likely raise the cost of new vehicles by around $3,000, resulting from higher manufacturing costs. Supply chain pressures add to this challenge, with 22% of finished vehicles and 40% of auto parts imported from Mexico or Canada. An insurance expert at LendingTree recently told me that EVs are especially sensitive to tariffs because their parts are more expensive and costlier to replace. EVs also have a less mature aftermarket for parts compared to ICE vehicles.
Paul, I just threw a lot at you. Are you ready to dive into this a little bit more?
Paul (1:54):
Absolutely! Great overview too. Thank you.
James Van Bramer (1:56):
Thank you so much. Yeah, just to start, what is the current state of the EV market? How are vehicle values trending? Is consumer demand growing?
Paul (2:07):
Great question. The company I work for builds products for the used EV market, so I’ll always default to that. But if you need me to shift to new EVs, just let me know.
For the used EV market right now, the best word to describe it is volatile. The overall used car market is also volatile due to macroeconomic uncertainty, industry-specific factors, and normal market fluctuations. Layering on legislation and policy uncertainty, as you just covered, adds even more choppiness.
It’s not brand-specific either—EVs are about twice as volatile as ICE vehicles, whether you look at 1-month, 3-month, 6-month, or even multi-year trends.
James Van Bramer (3:26):
How is demand trending? Is it growing, stabilizing, or declining?
Paul (3:31):
Right now, let’s break it down. If you look at used vehicle price indices, they’re the best way to strip out unit-specific factors and see pure supply and demand trends.
During COVID, used EV prices surged 60%, then dropped 40%. If you do the math, EVs are now 7% below pre-COVID levels (not counting this week’s slight price uptick).
For ICE vehicles, the numbers are very different: they saw a 70% increase, followed by an 18% drop, meaning they’re still 40% above pre-COVID levels. That’s a huge contrast—EVs are selling for less than pre-pandemic prices, while ICE vehicles still hold a premium.
Even factoring in inflation (CPI up ~25%), EVs have dropped below inflation-adjusted levels, making them historically undervalued.
James Van Bramer (5:56):
With that in mind, can we expect EV prices to stabilize, or could they decline even further? I often hear $25,000 being a floor—do you agree?
Paul (6:19):
EVs follow the same laws of supply and demand as any other product.
Looking at supply, used EV wholesale supply increased 400% over three years. That sounds massive, but in absolute terms, it’s only a few thousand extra units per week. Despite this, prices have fallen dramatically, which tells me that the real issue is demand.
Looking ahead:
2025: ~23,000 more used EVs enter the market.
2026: Over 300,000 additional units.
2027: Supply will double again.
With that kind of supply increase, we need stronger demand to balance prices.
As for the $25,000 price floor, I actually think $25,000 is a ceiling, not a floor. Vehicles under that threshold qualify for the $4,000 federal rebate, so pricing naturally clusters there. If the rebate disappears, prices will adjust downward based on true market demand.
James Van Bramer (9:28):
What other factors could shape used EV valuations this year?
Paul (9:33):
Short-term, the biggest factor is federal rebate uncertainty—we’re already seeing a last-minute demand surge from buyers trying to lock in credits.
Longer-term, the biggest pressure is supply. Off-lease EVs will flood the market, doubling year after year. Battery prices are also falling—down 20% last year, with more declines expected.
Energy costs matter too. Gasoline is projected to drop 2-3%, while electricity rises 2-3%, though neither is a huge factor.
If gas drops to $2.50/gallon, that could hurt EV demand. If gas jumps to $4/gallon, it could boost EV sales.
James Van Bramer (12:36):
How might tariffs affect EV replacement part costs—particularly batteries?
Paul (13:01):
EVs rely more on imported parts than ICE vehicles—50-70% of EV parts are imported, versus 40-50% for ICE. Batteries depend on lithium, cobalt, nickel, and rare earth metals, all of which come from overseas.
Short-term, tariffs will raise new EV costs, which could push demand toward used EVs. Longer-term, tariffs might push automakers to manufacture locally, increasing competition and eventually lowering prices.
James Van Bramer (15:42):
Could trade policies shift consumer preference to used EVs?
Paul (15:52):
Absolutely. New EVs are still luxury-priced, but used EVs are increasingly affordable alternatives. More off-lease EVs mean lower prices, higher supply, and more buyers entering the market.
James Van Bramer (16:59):
Most forecasts expect EV market share to hold at 9% this year. What’s your final take?
Paul (17:07):
Long-term, EV adoption is inevitable. In 20-30 years, most of us will drive EVs.
First-wave adopters have already bought in. The challenge now is convincing the next group—people like me who want an EV but are hesitant due to cost, infrastructure, or cold-weather concerns.
As battery diagnostics, charging networks, and costs improve, those barriers will fade. In 10 years, EVs will behave just like ICE vehicles in the used market.
James Van Bramer (19:10):
Paul, thanks for joining us.
To our audience, follow us on X (Twitter) and LinkedIn, and join us at Auto Finance Summit East 2025 (May 12-14, Nashville, TN). Visit autofinancenews.net for more insights.
Paul (19:47):
Thanks for having me.
Used EV values have fluctuated amid uncertainty over tax credits and potential tariffs.
“For the used EV market, if you want to describe it in one word right now, it’s ‘volatile,’” Paul Fortin, co-founder and head of automotive products at Exponential Markets, told Auto Finance News.
“The reason it’s volatile is that the overall -car market right now is also volatile. There’s uncertainty with macroeconomic variables, there’s uncertainty with industry variables, and there’s a normal volatility that exists,” he said.
In the short term, with talk of federal tax incentives being eliminated, consumers are rushing to purchase a used EV or lease a new one before the incentives are removed, Fortin said.
In January, used EV sales increased 30.5% year over year, reaching 26,933 units, while the supply of used EVs tightened to 45 days’ supply, down 23.3% YoY, according to a Feb. 20 report by Cox Automotive.
Meanwhile, after declining in January, the Exponential Electric Vehicle Index, measuring wholesale prices of used EVs and inventory awaiting sale, landed at 91.88 as of Feb. 20, up 1.6% year to date, and 4.2% YoY.
“In the short term, you have these forces that are pushing values up,” Fortin said. “On the longer term, you have these forces that are pushing [values] down.”
During this special episode of the “Weekly Wrap,” podcast, Auto Finance News Associate Editor James Van Bramer discusses used EV price volatility with Exponential Markets’ Fortin.
Subscribe to “The Roadmap Podcast” on iTunes or Spotify, or download the episode.
Auto Finance Summit East 2025 is set for May 12-14 at the JW Marriott Nashville featuring fireside chats with Santander Consumer USA and Chase Auto. Visit autofinance.live for more information. Early-bird registration is available here.
Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain.
Hello everyone and welcome to The Road Map from Auto Finance News, the nation’s leading newsletter on automotive lending and leasing since 1996. Today, we have a special edition where I’m joined by Paul Fortin, Co-founder and Head of Automotive Products at Exponential Markets. Today, Paul and I will discuss the used EV market and the various factors that will play into valuations in 2025.Before we get started, I’d like to share some key background points. Though there are plenty of headlines to choose from when it comes to EVs and the automotive industry, the new presidential administration has halted state investments in public EV charging stations and proposed ending EV tax credits. Those credits include a $7,500 rebate on new EVs, which drove EV leasing up substantially last year. The used EV credit also offers a $4,000 rebate on used EVs priced at or below $25,000.
Tariff proposals could further disrupt the market. Wolfe Research, an independent firm, found that Trump’s tariffs would likely raise the cost of new vehicles by around $3,000, resulting from higher manufacturing costs. Supply chain pressures add to this challenge, with 22% of finished vehicles and 40% of auto parts imported from Mexico or Canada. An insurance expert at LendingTree recently told me that EVs are especially sensitive to tariffs because their parts are more expensive and costlier to replace. EVs also have a less mature aftermarket for parts compared to ICE vehicles.
Paul, I just threw a lot at you. Are you ready to dive into this a little bit more?
Paul (1:54):
Absolutely! Great overview too. Thank you.
James Van Bramer (1:56):
Thank you so much. Yeah, just to start, what is the current state of the EV market? How are vehicle values trending? Is consumer demand growing?
Paul (2:07):
Great question. The company I work for builds products for the used EV market, so I’ll always default to that. But if you need me to shift to new EVs, just let me know.
For the used EV market right now, the best word to describe it is volatile. The overall used car market is also volatile due to macroeconomic uncertainty, industry-specific factors, and normal market fluctuations. Layering on legislation and policy uncertainty, as you just covered, adds even more choppiness.
It’s not brand-specific either—EVs are about twice as volatile as ICE vehicles, whether you look at 1-month, 3-month, 6-month, or even multi-year trends.
James Van Bramer (3:26):
How is demand trending? Is it growing, stabilizing, or declining?
Paul (3:31):
Right now, let’s break it down. If you look at used vehicle price indices, they’re the best way to strip out unit-specific factors and see pure supply and demand trends.
During COVID, used EV prices surged 60%, then dropped 40%. If you do the math, EVs are now 7% below pre-COVID levels (not counting this week’s slight price uptick).
For ICE vehicles, the numbers are very different: they saw a 70% increase, followed by an 18% drop, meaning they’re still 40% above pre-COVID levels. That’s a huge contrast—EVs are selling for less than pre-pandemic prices, while ICE vehicles still hold a premium.
Even factoring in inflation (CPI up ~25%), EVs have dropped below inflation-adjusted levels, making them historically undervalued.
James Van Bramer (5:56):
With that in mind, can we expect EV prices to stabilize, or could they decline even further? I often hear $25,000 being a floor—do you agree?
Paul (6:19):
EVs follow the same laws of supply and demand as any other product.
Looking at supply, used EV wholesale supply increased 400% over three years. That sounds massive, but in absolute terms, it’s only a few thousand extra units per week. Despite this, prices have fallen dramatically, which tells me that the real issue is demand.
Looking ahead:
2025: ~23,000 more used EVs enter the market.
2026: Over 300,000 additional units.
2027: Supply will double again.
With that kind of supply increase, we need stronger demand to balance prices.
As for the $25,000 price floor, I actually think $25,000 is a ceiling, not a floor. Vehicles under that threshold qualify for the $4,000 federal rebate, so pricing naturally clusters there. If the rebate disappears, prices will adjust downward based on true market demand.
James Van Bramer (9:28):
What other factors could shape used EV valuations this year?
Paul (9:33):
Short-term, the biggest factor is federal rebate uncertainty—we’re already seeing a last-minute demand surge from buyers trying to lock in credits.
Longer-term, the biggest pressure is supply. Off-lease EVs will flood the market, doubling year after year. Battery prices are also falling—down 20% last year, with more declines expected.
Energy costs matter too. Gasoline is projected to drop 2-3%, while electricity rises 2-3%, though neither is a huge factor.
If gas drops to $2.50/gallon, that could hurt EV demand. If gas jumps to $4/gallon, it could boost EV sales.
James Van Bramer (12:36):
How might tariffs affect EV replacement part costs—particularly batteries?
Paul (13:01):
EVs rely more on imported parts than ICE vehicles—50-70% of EV parts are imported, versus 40-50% for ICE. Batteries depend on lithium, cobalt, nickel, and rare earth metals, all of which come from overseas.
Short-term, tariffs will raise new EV costs, which could push demand toward used EVs. Longer-term, tariffs might push automakers to manufacture locally, increasing competition and eventually lowering prices.
James Van Bramer (15:42):
Could trade policies shift consumer preference to used EVs?
Paul (15:52):
Absolutely. New EVs are still luxury-priced, but used EVs are increasingly affordable alternatives. More off-lease EVs mean lower prices, higher supply, and more buyers entering the market.
James Van Bramer (16:59):
Most forecasts expect EV market share to hold at 9% this year. What’s your final take?
Paul (17:07):
Long-term, EV adoption is inevitable. In 20-30 years, most of us will drive EVs.
First-wave adopters have already bought in. The challenge now is convincing the next group—people like me who want an EV but are hesitant due to cost, infrastructure, or cold-weather concerns.
As battery diagnostics, charging networks, and costs improve, those barriers will fade. In 10 years, EVs will behave just like ICE vehicles in the used market.
James Van Bramer (19:10):
Paul, thanks for joining us.
To our audience, follow us on X (Twitter) and LinkedIn, and join us at Auto Finance Summit East 2025 (May 12-14, Nashville, TN). Visit autofinancenews.net for more insights.
Paul (19:47):
Thanks for having me.