The EV market could get a huge influx of cheaper cars — but not fresh from the factory. That's good news for consumers. For EV makers? A mixed bag. While the used wave might hurt the sales of new EVs, it might also bring EV-phobic buyers into the market.

In its latest EV intelligence report, consumer research firm J.D. Power projected that a massive amount of EVs returning off leases in the US will provide a large supply of EVs for sale.

“In 2026 returning EV leases will surge ... 230% with roughly 215,000 EVs returning,” said Elizabeth Krear, vice president of J.D. Power’s EV Practice.

J.D. Power projects thousands of EVs that consumers aren’t willing to buy out after the lease contract ends will return to used dealer lots. The firm said returning leases hit approximately 18,900 EVs in 2021 but will reach 65,600 by the end of 2024 — then balloon to 215,000 EVs by 2026.

While that 215k figure in 2026 is only 5.3% of all vehicles coming off leases in the US, it will be significantly higher than the approximate 1.5% projected for 2024 and 2025.

More supply generally means better pricing for consumers. New data shows that even currently, EV prices in the used market are under pressure. According to Mannheim’s latest used vehicle value index, used gas-powered car prices fell 3.5% in October, whereas pure EV prices fell by 11.1%.

And the downward pressure on prices will continue.

“Because the average transaction price of EVs has seen a decline in the past two years of over $10,000, for many returning lessees, it will be less expensive for them to lease a new EV or purchase a new gas-powered vehicle. Hence, this will put tremendous pressure on the used EV market, and, based on supply and demand, could drive used EV prices down,” Krear said.

Perhaps these owners who return their leased EVs will lease another brand-new one — but there are caveats to that.

The generous lease provisions of the federal EV tax credit allow for a $7,500 deduction for all leased vehicles, $7,500 for buying certain new EVs, and $4,000 for purchasing used EVs. If the incoming Trump administration and GOP-led Congress repeal elements of the Inflation Reduction Act dealing with consumer EV tax credits, leasing or buying new EVs will become less attractive.

“On one hand, if the tax incentives are removed completely, the price of new EVs will increase, making used EVs a more affordable option. However, if they remain in place, then leasing a new EV could be the better choice,” Krear added. “It’s difficult to speculate on all the mixed scenarios the industry could see with federal incentive changes.”