Americans want electric cars – they just can’t find them
Prices for used electric vehicles are climbing because new models are – and are likely to remain – in short supply. Justin Sullivan/Getty Images Within three months of the U.S.
In early 2026, gasoline prices in the U.S. rose sharply from $2.94 to $4.35 per gallon within three months following military strikes on Iran. This increase created an ideal moment for Americans to consider switching to electric vehicles (EVs), which are cheaper to run than gas-powered cars. However, the response was mixed: while sales of hybrid electric vehicles (HEVs) rose by 18% compared to 2025, fully electric vehicle (EV) sales dropped by 16% over the same period. This discrepancy suggests that high gas prices alone do not guarantee a shift to EVs, as other factors like availability and price also play a role. Hybrids, which combine gas and electric power, became a more accessible alternative for many buyers.
In July 2025, a U.S. tax and spending law ended federal tax credits for electric vehicles. These credits had provided up to $7,500 for new EVs and $4,000 for used ones, encouraging purchases. After the credits expired on September 30, 2025, automakers reduced EV production. For example, General Motors laid off over 3,400 workers at EV and battery plants and shifted production to energy storage batteries instead of cars. Ford wrote off $19.5 billion from its EV business, stopped making the all-electric F-150 Lightning, and converted a Tennessee EV plant to produce gas-powered trucks. This policy change directly impacted the availability of EVs in 2026.
Despite rising gas prices in 2026, EV sales remained lower than expected because supply could not meet demand. While hybrid inventories on dealer lots were 19% higher in March 2026 compared to 2025, EV inventories shrank from 130 days of supply in early 2026 to just 78 days by August. This shortage led to smaller discounts on new EVs, with median discounts dropping from 9.8% in February to 4.7% in June. Dealers had little inventory to clear, indicating strong demand rather than excess supply. Meanwhile, hybrid sales stayed above 216,000 units per month throughout the summer, while EV sales lagged at 86,000 in August, down from 101,000 in May.
The end of tax credits and rising demand for EVs also affected the used EV market. Prices for used electric vehicles increased by 13% through late June 2026, adding about $3,500 to the cost of a typical used EV. For instance, the price of a used 2023 Chevrolet Bolt rose nearly 20% from January to June 2026. Inventories of used EVs also declined, with only 31 days of supply available in May 2026, which was 23% lower than the previous year. This scarcity made used EVs more expensive and harder to find, further limiting options for buyers.
Federal policies in 2026 have made it harder for the U.S. EV market to grow. On September 28, 2026, a new fuel economy rule was released that loosens efficiency requirements for gas-powered vehicles and ends a system where automakers could earn credits for producing more efficient vehicles, including EVs. These credits could be sold to other automakers. The rule also estimates that buyers will save $1,289 on gas-powered cars but may spend $1,600 more on gas over the car’s lifetime, based on fuel price forecasts that do not account for current high prices. Additionally, the U.S. has imposed tariffs of over 100% on EVs made in China and banned cars from Chinese-linked automakers starting with model year 2027, even if they are built in the U.S.
China dominates global EV manufacturing, producing nearly three-quarters of the world’s electric cars. In 2024, Chinese buyers could choose from over 130 EV models priced under $40,000, while American buyers had only four such models. The U.S. market remains mostly closed to Chinese EVs due to high tariffs and regulatory bans. A pending bill in Congress could further block Chinese investment in U.S. auto factories. These restrictions limit the supply of affordable EVs in the U.S., keeping prices high and reducing choices for American consumers despite strong interest in electric vehicles.
