Upcoming Lease Returns Could Mean Great Deals on Used EVs

Strong leasing activity in the early '20s should soon bump up the used-EV inventory.

Chris Teague | 

Feb 28, 2025 | 3 min read

Tesla

Buying a returned lease vehicle has long been a way to save money on a car or truck. They are generally lightly used and come from recent model years, so they are likely to include newer features.

Throngs of used electric vehicles from lease returns are expected to hit the market in the next couple of years. Here's why and how car shoppers can benefit.

EV Battery Concerns Amidst the Inflation Reduction Act

A recent J.D. Power E-Vision Intelligence Report showed that EV leases grew 355% during 2023 and 88% in September 2024 alone. Leases accounted for almost half of all franchise EV sales (about 46%) and 21% of total EV sales, including Tesla.

Part of that rise has been due to lease incentives. Thanks to the federal Inflation Reduction Act, dealers who purchase electric vehicles to lease have been able to claim a $7,500 federal tax credit, and many have passed those savings on to customers.

Additionally, as J.D. Power pointed out, buyers' uncertainty about long-term battery health and their desire to cash in on current incentives have made leasing feel safer than purchasing.

EV Lease Returns Could More Than Double in 2026

While the COVID-driven inventory shortages of the early 2020s have resulted in fewer lease returns overall, J.D. Power predicted that EV lease returns will roar back in 2026 with a 230% increase, bringing as many as 215,000 EVs up for sale.

EV share of the overall returned vehicle pool is expected to grow from 1.6% today to around 5.3% in 2026, a significant jump, though a small number in the big picture of lease returns. Overall, far fewer vehicles, gas or electric, are coming off lease, which is expected to cause a shortage of used vehicles in 2025 and 2026.

EV Battery Warranties and Other Factors

Buying a used vehicle of any kind comes with a layer of stress, but warranties can be your friend. The federal government requires automakers to cover new EVs with an eight-year or 100,000-mile warranty on their battery systems, and California buyers get an additional two years or 50,000 miles.

Some warranties only cover batteries that have degraded beyond a certain extent, such as holding just 70% of their original capacities. Because leased vehicles have strict age and mileage limits, many remain covered by their factory warranties, potentially leaving the next buyer with several years and tens of thousands of miles of warrantied driving.

Tesla and Ford May Dominate the Used-EV Listings in 2025

Looking back to 2022 will give us a good idea of what to expect as lease returns begin showing up in 2025. The five bestselling EVs of 2022 were the Tesla Model Y, Tesla Model 3, Ford Mustang Mach-E, Tesla Model S, and Chevrolet Bolt EV/EUV.

The Tesla Model X, Hyundai Ioniq 5, Kia EV6, VW ID.4, Ford F-150 Lightning, and Rivian R1T were also top sellers. For shoppers hoping to find a good deal in the next year or two, one of these top-selling EVs from 2022 could be just the ticket.

Chris Teague

Chris is a longtime automotive journalist, radio host, and content creator. Before joining Capital One, he covered news for Autoblog, The Drive, and The Truth About Cars. He also co-hosts America on the Road, an automotive radio show airing on more than 500 stations and the American Forces network every Saturday morning. Chris grew up around cars, helping in his family's transmission and body shop businesses, and that lifelong passion shines through in every piece of content he creates.