You Think Tesla Sales Are Weak Now? Just Wait.

The U.S. electric-vehicle industry has a looming problem that has nothing to do with politics or Tesla CEO Elon Musk. The issue: Used EV values. They point to slowing sales and lower prices in 2026, until things normalize.

Americans bought 310,839 EVs in the second quarter of 2025, down 6% year over year. Tesla sales dropped almost 13% to 143,535 vehicles. Its market share slipped 3.5 percentage points to 46.2%.

There is some hope for a temporary third-quarter rebound. The $7,500 federal EV purchase tax credit goes away in September, leaving car buyers a few more weeks to get in under the deadline. It will be far cheaper for someone to buy an EV on Sept. 30 than on Oct. 1.

After the credit is gone, EVs will simply be much more expensive to lease and purchase. Buyers might prefer to look for a deal on used EVs. Prices for those are, relatively, dirt cheap.

Culture wars and range anxiety are often blamed for the EV slowdown, says RBC analyst Tom Narayan, adding investors should focus on used car prices. He found that late-model used battery electric vehicles could be bought for about 55%of their original sticker price. That number for internal combustion engine cars is closer to 75%.

A 2022 dual-motor long-range Model Y can be found on Cars.com or other car-buying platforms for about $25,000 to $30,000. That car started for about $50,000 new. Used EVs carry a discount of about 45% off new vehicles price tags.

Part of the problem is the tax credit, explains Narayan. The original $50,000 price isnt the price that most car buyers have paid. Including state-level EV incentives, the original purchase price might have been closer to $40,000 or $42,000. With that as the starting price, the used car value declines dont look nearly as alarming.

That math, however, doesnt really help makers of EVs. Sales are