Last Updated on: 17th July 2025, 02:52 am

I recently polled readers on what will happen to used electric car prices when the $4,000 US tax credit for used EVs goes away, and then reported back those results. However, in response to that second article, a few readers chimed in with some arguments on why they actually expect used EV prices will go up in October. They seem like solid arguments — very solid arguments — so I’m reprinting them here.

Larry Evans wrote:

“The $7500 new car subsidy made used cars less valuable in comparison. New EV prices will effectively go up, while inventory will become more limited. Less emphasis will fall on lower cost models that are harder to make profitably. There is no motivation to sell a higher quantity of EVs to meet ZEV and CAFE requirements. No US-based automaker currently makes money on EVs without regulatory credits. And tariffs will increase the price of imported EVs from Japan/Mexico/ROK/Europe… in addition to blocking lower-cost Chinese EVs. And there is a good chance we will see an overall economic contraction, which tends to further shift people from new to used vehicles and also tends to increase focus on areas where people can save money (such as charging vs using gas). That market shift from new to used cars tends to increase prices.

“Limited supply with higher prices for new models tends to increase prices of used models.”

It’s hard to argue with that.

Gabe Ets-Hokin also stated:

“I’m hoping used EVs actually gain value, as new EVs will jump $7500 in price. Especially the ones that will retail over $25,000 and wouldn’t be eligible for the $4000 credit even if Great Leader didn’t kill it.

“But I suck as a prognosticator, so I could be wrong.”

Succinct, but the same core pint. Seems like good prognostication to me.

Cypress said mostly the same thing:

“More likely used EV prices will go up. New EVs will no longer get the $7500 tax credit. So by extension, resale value of a used EV is likely to go up. At least in the short term. Longer term, automakers are likely to lower their prices somewhat.”

Yes, with prices of new EVs effectively rising by $7,500 in October, the value of used EVs should immediately jump up. We’ll see what we notice when the time comes.