Used car salesman Nicholas Beiza got a call earlier this month at Fullerton Ford from a theology professor looking to buy a new car.
The Biola University academic was car shopping after his house-sitter totaled his Ford Escape SUV.
Instead of putting his customer in a new car, Beiza sold the professor a used one — a sporty, all-electric Ford Mustang Mach-E with 55,000 miles on the odometer. Beiza drove the $25,000 car over to the professor’s home and handed him the keys.
“He previously owned a Mustang long time ago and was super-interested in getting another one, and settled on an EV because of gas prices,” Beiza said.
Dealerships across Southern California are seeing a similar trend unfolding as electric vehicle buying rises at a double-digit clip.
Auto experts cite demand from drivers who want to cut out pricey gas fill-ups due to tight supplies caused by the U.S. war with Iran, and a flood of leased EV vehicles helping car shoppers steer clear from new models selling for $50,000 or more. Last fall’s expiring federal incentives created another class of used EV buyers who rushed to buy something before the deals went away in a wobbly economy.
One used EV shopper described a “K-shaped” trend where consumers are buying a vehicle based on their budgets, big and small.
Tim Tipping, a resident of Claremont, bought a used 2023 Chevy Bolt on the last day that the $4,000 federal tax credit was offered — Sept. 30, 2025 — for used EVs before it expired.
“I always wanted an EV, and I didn’t think I could afford a brand new one,” Tipping said. “When I saw that it was the last month the rebate would be offered, I started looking at the used ones. I wanted to get one at under $20,000.”
Tipping said that since the Iran war began, he’s also bought four e-bikes to travel around his neighborhood for work and recreation with his family. “I bought them 100% because of the war.”
Double-digit growth
The EV data for used vehicle sales supports what dealerships already are seeing.
Mobility Global, an automotive data company, provided used EV data to the Southern California News Group showing a forecast of 20% growth this year over the state’s 142,649 registrations in 2025. The 2026 forecast is based on sales figures for the first five months of the year. It does not include extenuating circumstances like further disruptions to the economy, or tax credits — all of which could sway how much is really sold.
Statewide, sales are happening slightly faster than the 18% rate seen nationally over the same period, according to the data.
“You’ve got more inventory, and people are interested,” said Stephanie Brinley, associate director of Mobility Global’s AutoIntelligence. “The used market is much larger than ever.”
Meanwhile, new EV sales are projected to plummet 22% in 2026 over last year’s levels in California, while nationwide sales are expected to decline 25% over the same period, the data shows.
Yet another indicator of the market is Cox Automotive’s Manheim Used Vehicle Value Index for EVs — which tracks how many used EV vehicles have been sold at wholesale auctions to dealerships. The index jumped 12.3% in June on a year-over-year basis.
The average listing price for a used, all battery-powered EV was $38,342 in June, up 3.5% from May and 7% year-over-year, according to the index. The bullish pricing was broad-based, including several high-volume brands manufactured by Tesla, Chevrolet, Hyundai and Kia. This category does not include hybrid cars — which typically use an internal combustion engine and a battery-powered electric motor to maximize fuel efficiency.
The story is markedly different for new cars in California and the U.S.
Hybrid sales are booming, having reached their highest share on record in California’s new vehicle market in the first six months of the year. The 22.1% share is up from 19.5% for all of 2025, according to the California New Car Dealers Association.
That’s a significant chunk of growth to claim since California’s overall new car market fell 7.7% through the first six months of 2026, while the U.S. market fell 2.8%, according to CNCDA’s July 20 report. Registrations for new zero-emission vehicles (ZEV) — like electric-, plug-in hybrid-electric and fuel-cell electric vehicles — fell nearly 25% in the first half of 2026, compared with the same year-ago period due to the loss of last year’s federal tax credits.
Similar car buying trends were recently reported in Orange County and the Inland Empire.
The state hopes to spark a turn around in new EV car-buying with a rebate program, MyFirstEV, that could lead to more ZEV sales — and further boost the used vehicle market down the road as consumers trade-in their cars.
California’s MyFirstEV program provides a $3,500 instant rebate for first-time ZEV buyers, and $1,750 for first time buyers of a used EV that sells for less than $25,000. The $270 million joint initiative is funded by $135.5 million from the state and matched dollar-for-dollar by 13 participating automakers. It launches later this summer.
Other states are trying similar incentive programs, including Colorado, New Jersey, New York and Oregon, according to the Energy Department’s Alternative Fuels Data Center.
Expiring tax credits
The first wave of buying interest in used EVs began to emerge when federal electric vehicle tax credits expired Sept. 30, 2025, following their elimination under last year’s One Big Beautiful Bill Act. The repeal ended the up to $7,500 new vehicle credit and the $4,000 used vehicle credit — which is what Tipping tapped to buy his Bolt.
“I think that the market stalled after the money went away at the beginning of quarter four (October) of last year, but as gas prices continue to rise, especially here in California, the desire for EVs — primarily for pre-owned EVs under $30,000 — has increased,” said John Patterson, owner and president of OC Auto Group and its five Kia, Mazda and Hyundai dealerships in Orange County.
“Between my stores, we were selling zero EVs used, or very few in the fourth quarter (2025) and first quarter of 2026. It’s now increased four times that amount, if not more,” he said. “I don’t think we were expecting the war to go on like it has, and certainly that’s impacted our gas prices here in California at a level that we don’t see elsewhere,” Patterson said. “For used EVs, it’s a unique place we’re in.”
Stewart Benjamin, general manager of McPeek Anaheim Chrysler Dodge Jeep and RAM dealership, also is seeing modest growth in used EV sales.
His dealership once sold plug-in hybrid electric Jeep SUVs and Chrysler minivans until parent automaker Stellantis scrapped them amid the new EV sales slowdown.
“We’re seeing higher demand on used EV cars. People want to get one from $25,000 to $29,000. That’s our sweet spot for used EVs,” Benjamin said. “We’ve had a couple of Teslas, but they pretty much sell faster than the (internal combustion engine) cars. Without question, the used EVs are not the easiest cars to come by. Everybody wants them.”
Still, even with all of the optimism about the market from big dealers, mom-and-pop lots are sounding downbeat.
Chris Lucero, owner of Lux Automotive along Flat Rock Road in Riverside, said that the loss of the federal tax credit hurt his business.
“I was selling four to five used EVs a month before the tax credit expired,” Lucero said. “After it went away, I sell one every three months. I’m a smaller dealership, so it became impossible to do sales on the finance side as credit tightened.”
Lucero said that he’s downsizing his used car and EV dealership because sales are difficult. He blames the slowdown on a limp economy buffeted by inflation and soaring gas prices.
“I was making 20 to 25 used car sales (including EVs) a month over the past year. Now I’m having every car sit three to five months. It has worsened since the war. I’m not shutting down completely, but moving in a different direction toward commercial fleet truck sales, hoping its better.”
Higher gas prices
For sure, interest in buying a used EV has accelerated since the start of the U.S. and Israel-led war against Iran, which started Feb. 28.
“I think the consideration for used EVs is heightened because of the gas prices,” said Stephanie Valdez Streaty, director of industry insights with Cox Automotive in Atlanta. “Because of the uncertainty in the economy, with tariffs, and rising gas prices, I think consumers are holding off on buying new EVs that have an average vehicle price close to $50,000. It’s just out of reach.”
Elevated gas prices came after the war tightened the supply of crude oil moving through the Strait of Hormuz in the Middle East. About 20% of the world’s oil supplies pass through the Persian Gulf shipping route.
While gas prices have fluctuated since the war erupted, the fuel remains about $1 a gallon higher in California than last year’s pump price, according to data provided by GasBuddy, a gas price tracking service.
“The appeal for used EVs is real. Obviously, in California, we are experiencing extremely high gas prices. They’ve gone down a little bit in the past few weeks, but they are still quite high,” said Jessica Caldwell, head of insights for Edmunds, an online car-shopping and research platform. “The idea of buying a new vehicle — they are expensive, interest rates are high, insurance is high, and all the costs that are associated with buying a new vehicle — leaves you wondering if you are trying to solve a gas problem with a $50,000 answer. A lot of people may want to buy one, but it’s cost prohibitive.”
Leased EVs
EV insiders also say that a flood of contracts to lease EVs during the pandemic are beginning to expire, with inventory rising on dealership lots.
“About 1.4 million EVs were released [by leasing companies] between 2023 and 2025, so a lot of those are going to come off lease at a really good price point. I think consumers have a lot of options at a lower price point,” Valdez Streaty at Cox Automotive said. “A high percentage will probably enter the used retail market. This year, we’re forecasting probably about 300,000 coming off leases. If you can charge at home, it makes an even stronger value proposition. A lot of the volume will come from lease returns, people who are just getting rid of EV leases, and in California, it’s a pretty decent size.”
Jimmy Douglas, chief executive officer and founder of Plug, a Santa Monica-based online marketplace for consumers wanting to sell their EVs, and an auction venue for 700 dealerships wanting to buy them, sees a significant wave of used EVs hitting the market over the next few years.
“I actually have a controversial belief that the used EV market will become a double-digit portion of the overall used car market by the end of the decade, which is a bold claim because it’s currently sitting at around 2%,” said Douglas, a former director of sales and delivery operations with EV-leader Tesla.
Through mid-year 2026, used EVs accounted for between 2% and 2.8% of the total used car marketplace in the U.S., according to Cox Automotive.
Douglas sees the used EV market making up 10% by 2030. His forecast is based on more than a million leased EVs rolling off the books of auto rental companies and consumers in coming years.
For consumers selling an EV, Plug makes a cash offer instantly. Dealerships involved in the daily auctions — 6 a.m. to noon — snatch them up. A month ago, Plug surpassed $100 million in total sales, a highwater mark for the three-year-old marketplace.
Douglas estimates that 62% of Plug’s sales are moved across state lines, with an average out-of-state move of 1,480 miles via auto transport carriers. So where are the used EVs headed?
“The No. 1 migration route for used EVs is from California to Texas,” said Douglas. “They finally found something to import willingly.”