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Welcome to the Market Pulse—your no-fluff cheatsheet to auto retail, built to help dealers price right, stock smart, and stay ahead.
EV demand is surging as tax credits fade: New EV sales rose 26% MoM and 20% YoY in July, while used EVs jumped 23% MoM and 40% YoY.
Leasing is fueling EV sales: Nearly 1 in 5 new leases in July were electric, a 31% MoM jump in EV lease penetration.
The affordability reset is coming: The real test comes in 2026, when EV growth depends on more affordable, $30K–$35K models like the Nissan Leaf and Kia EV4.
(Source: Bloomberg / InsideEVs / Cox Automotive / KBB)
EV demand is surging (as expected) because incentives and tax credits are driving demand.
With just 37 days left before the $7,500 new EV tax credit and $4,000 used EV tax credit expire (September 30)—demand is spiking.
Dealers are reporting 20–30% more foot traffic, and July sales reflected that increase:
130,082 new EVs sold (+26% MoM, +20% YoY)
36,670 used EVs sold (+23% MoM, +40% YoY).
Together, that lifted EV share to 9.1% of new sales and 2.2% of used.
Despite supply tightening, prices are sliding on both fronts:
The average transaction price (ATP) on a new EV fell 4.2% YoY to $55,689 as incentives hit a record 17.5% of ATP. Used EVs, meanwhile, averaged $35,263 (–1.9% MoM, +1.6% YoY).
WHAT’S AT STAKE:
Dealers who are leaning into EV demand really have about two weeks to source, recon, and merchandise inventory while buyers are still searching. After that, the risk of being stuck with high-priced units goes up fast.
Leasing is also holding up EV sales, but front-end gross is declining as a result.
According to StoneEagle, the average dealer booked 16.3 new lease deals in July, up 12% from June. Nearly 1 in 5 leases were was electric—a 31% MoM jump in EV lease penetration.
The catch: Average gross on new leases dropping from +$114 in June to –$47 in July, the first negative number since 2020.
Mainly because dealers leaned on aggressive EV lease programs to move units before the tax credit cutoff, and while those deals brought payments down, they also pushed average front-end gross into the negative.
F&I stayed steady at $1,312 per vehicle and helped cushion the hit, but not enough to turn the overall deal profitable.
WHY IT MATTERS:
Most EVs sold today are leases, which means they’ll cycle back in 2–3 years.
Start tagging those high-lease models in your DMS or captive reports now, and track them with tools like vAuto or MarketEyeQ so you’re not blindsided when thousands of the same units return off-lease, putting pressure on residuals, trade equity, and acquisition strategy.
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Right now, urgent messaging and affordable lease programs are moving EVs prior to the deadline.
Take Hansel Auto Group in California, where the team added a live countdown to every store site so shoppers see the clock ticking.
Sourced via Hansel Honda’s dealership website
“My BMW dealership is up 38% YoY, which is the ninth best improved dealer in the country in any market, and I believe it has a lot to do with EV sales,” David Long, executive GM for the group, told CDG News.
He also credits this, in part, to his team’s EV-specific training, which layers in manufacturer modules, online and in-person training, and even ChatGPT simulations, which are then reinforced with role-play during morning meetings.
“We do all the different training methods so that the salesperson knows, at the very least, as much as the customer, which is not always the case,” he said.
His POV: EV demand isn’t going away, and with more owners holding onto cars longer, his team is positioning to capture the handoff when those drivers are finally ready for their next model.
Long’s confidence reflects what’s working in the showroom, even as others like David Thomas, director of marketing with CDK Global, say the broader market still has hurdles to clear.
“Come October 2, the fall off is gonna be tremendous,” said Thomas.
He says Q4 is already distorted by pull-forward demand, and the real test will come in January 2026 when the clock resets.
That’s why he sees 2026 hinging on affordable models like the redesigned Nissan Leaf and Kia EV4, priced in the $30K–$35K range.
“That’s where the Prius lives, that’s where the Camry lives. Those are the bread-and-butter, get to work, cars,” he explained.
His call: EV share will hold a steady 8–9% market share in 2026, avoiding a collapse, with new EV demand anchored in affordability, and used EV supply steadily growing as leases return to market.
Q3 is about urgency. But Q4 will show how far OEMs go to keep EVs moving without the $7,500 credit.
My guess: Back-up plans are already in play—captive lease boosts, loyalty cash, trimmed-down trims to hold $399/month, maybe even regional spiffs in EV-heavy markets.
What do you think will happen to EV sales after September 30?
Missed yesterday’s episode of Daily Dealer Live?
Presented by:
Banks on Private Equity Reshaping Auto, Vanguard Kia on Store Turnaround
Featured guests:
Jason Villa, General Manager of Vangaurd Kia of Arlington
Cliff Banks, President and Founder of The Banks Report and AUTOVATE.org
