The U.S. electric vehicle market continued to show signs of stabilization in May, recovering from softer conditions seen in April.
While new EV sales improved month over month, demand remained below year-ago levels. At the same time, the used EV segment maintained strong growth, highlighting its increasingly important role in expanding access to electric mobility.
New EV Sales Rebound from April Lows
An estimated 84,746 new electric vehicles were sold in May, representing a 10.3% increase compared with April. However, sales remained 21.9% lower than the same month last year. Despite the annual decline, it marked the smallest year-over-year drop since the removal of government purchase incentives.
EVs accounted for 5.7% of total new vehicle sales during the month, improving sequentially but still trailing levels recorded a year earlier.
Tesla remained the dominant player in the market, delivering 40,578 vehicles and capturing 47.9% of total EV sales. While still firmly in the lead, Tesla’s market share slipped slightly as competitors posted stronger monthly gains.
Hyundai, Cadillac, Toyota and Subaru recorded notable sales growth during May, while weaker performances from Chevrolet and Rivian tempered the broader market recovery. Among individual models, the Tesla Model Y and Model 3 continued to lead the segment, followed by strong performances from the Hyundai Ioniq 5, Ford Mustang Mach-E and Toyota bZ.
Used EV Market Continues Strong Expansion
The used EV market remained one of the brightest spots in the industry. Sales reached 42,923 units in May, up 5.5% from April and 24.7% higher than a year earlier. Used EVs accounted for 2.8% of total used vehicle sales.
Tesla again led the used EV market with 15,353 vehicles sold through non-Tesla dealerships, despite a slight month-over-month decline. Hyundai, Chevrolet, Ford and BMW rounded out the top-selling brands.
Growth was broad-based across the segment, with Hyundai, BMW, Volkswagen and Cadillac posting particularly strong gains. The continued influx of off-lease vehicles and trade-ins is helping expand inventory across a wider range of brands and price points, making electric vehicles more accessible to budget-conscious buyers.
EV Inventory Tightens
New EV inventory continued to tighten in May. Days’ supply fell to 71 days, remaining more than 40% below year-earlier levels. For the first time in some time, new EV inventory levels were lower than those of internal combustion engine vehicles, signaling a healthier balance between supply and demand.
Several major automakers, including Hyundai, Cadillac, Ford and BMW, reported meaningful declines in inventory levels, supported by stronger sales and disciplined production planning.
The used EV market experienced even tighter conditions. Days’ supply dropped to 31 days, down 7.5% from April and 23.3% lower than a year ago. Used EV inventory remained significantly leaner than the broader used vehicle market for a third consecutive month, reflecting strong consumer demand and faster inventory turnover.
Volkswagen and Honda led the decline in used EV inventory, while Tesla, Toyota and Hyundai also maintained relatively low stock levels.
EV Prices Continue to Shift
The average transaction price (ATP) for a new EV reached $54,532 in May, down 0.5% from April and 4.0% lower than a year earlier. This marked the eleventh consecutive month of annual price declines.
Incentives remained elevated at approximately 14% of ATP, averaging $7,611 per vehicle. Tesla continued to exert downward pressure on industry pricing, with its average transaction prices falling 1.0% month over month and 3.4% year over year.
Price declines across the industry were partially offset by stronger sales of premium electric vehicles from brands such as Cadillac and BMW, while lower-priced, high-volume models—particularly from Chevrolet—recorded weaker sales.
In contrast, used EV prices moved higher. The average used EV listing price rose to $37,083, increasing 3.8% month over month and 3.1% year over year.
Price gains were widespread, with 31 brands posting increases, including Tesla, Chevrolet, Hyundai and Volkswagen. As a result, the price premium for used EVs over comparable internal combustion vehicles widened to $2,227, up from $1,398 in April.
Outlook: Gradual Growth Ahead
Looking ahead, the EV market is expected to continue its gradual recovery as new models enter the market and incentives remain attractive for consumers. However, growth is likely to remain uneven as automakers adjust product strategies and consumer demand fluctuates.
The outlook for used electric vehicles appears more predictable. Rising inventory from off-lease returns, improving model availability and growing consumer interest in affordable EVs are creating favorable conditions for sustained expansion.
As the market continues to mature, the used EV segment is increasingly becoming a key driver of broader electric vehicle adoption, helping bring EV ownership within reach of a larger share of consumers.
[source: Cox Automotive]
