EV Market Monitor

The electric vehicle market showed signs of stabilization in May 2026, with new EV sales rising 10.3% sequentially despite remaining below year-ago levels. While the new-vehicle segment continues to face uneven demand, the used EV market is experiencing robust growth, supported by a 24.7% year-over-year increase in sales and expanding inventory from off-lease returns. These trends highlight a shifting landscape where tightening supply and elevated incentives are defining the sector's recovery and broadening consumer access.

New EV sales reached an estimated 84,746 units in May, representing 5.7% of the total new-vehicle market. Although this reflects a significant 21.9% decline from the previous year—the smallest annual drop since the removal of government support—it marks a notable month-over-month improvement. Tesla maintained its volume leadership with 40,578 units, though its market share slipped to 47.9% as competitors like Hyundai, Cadillac, Toyota, and Subaru gained ground. Popular models driving this volume included the Tesla Model Y and Model 3, followed by the Hyundai Ioniq 5, Ford Mustang Mach-E, and Toyota BZ.

In contrast to the new market's volatility, the used EV segment grew to 42,923 units, a 24.7% increase over May 2025. According to Stephanie Valdez Streaty, Director of Industry Insights for Cox Automotive, this growth is fueled by a rising wave of off-lease returns and trade-ins that are increasing inventory depth. Supply for both new and used EVs is tightening; new EV days’ supply fell to 71, while used EV days’ supply dropped to 31. Notably, used EV inventory is turning over faster than internal combustion engine (ICE) vehicles, marking the largest gap between the two segments since September 2025.

Pricing for new EVs continued an 11-month downward trend, with the average transaction price (ATP) falling to $54,532, supported by high incentives averaging 14% of the ATP, or approximately $7,611 per vehicle. Tesla’s aggressive pricing strategy, which saw a 3.4% year-over-year decline, remains a primary driver of industry-wide price compression. Conversely, used EV listing prices rose to $37,083, widening the price premium over ICE vehicles to $2,227. Looking ahead, Cox Automotive expects new EV sales to trend slowly higher as new products arrive, while the used market is projected to see consistent, healthy expansion driven by improved availability and consumer interest in affordable options.