CBT News is reporting the U.S. automotive market is preparing for a massive influx of over 1 million off-lease electric vehicles (EVs) by 2028. This surge is expected to significantly reshape the used-car landscape.
Key Takeaways
The Coming Wave: Lease expirations are projected to skyrocket from 123,000 in 2025 to 600,000 in 2027.
Pricing Pressure: Current used EV prices are already falling below the original "residual values" projected by automakers, leading to potential financial losses for manufacturers and their financing arms.
Dealer Impact: While the "glut" may squeeze dealer profit margins, it provides a unique opportunity for budget-conscious shoppers to enter the EV market at lower price points.
Mitigation Strategies: A Deloitte report suggests automakers should focus on converting leases to retail loans or shifting inventory to corporate fleets rather than relying solely on open auctions.
Market Dynamics
The outcome of this supply surge depends on a few critical factors:
Gas Prices: Rising fuel costs (averaging well over $4 per gallon currently) are driving a 25% increase in EV search traffic.
Infrastructure: Continued expansion of charging networks will be vital for demand to keep pace with the growing supply.
Manufacturer Proactivity: Success will depend on how effectively automakers "shape demand" rather than just reacting to the influx of returned vehicles.
A supple surge is music to car buyers’ ears. With used EVs, the focus will be on battery health, but just as importantly, the features and are they what a particular buyer is in the market for.
Thanks for reading everybody!
-Paul