The EV Market Enters Its ‘Reset Era’ in October as Federal Tax Credits Expire and Prices Rise
EV leasing and pricing trends show a market finding balance
Leasing has been the backbone of EV growth largely because of the $7,500 federal tax credit that made it the most affordable path into an electric vehicle. That dynamic hit a fever pitch this summer as automakers and dealers leaned heavily on lease offers to draw shoppers in before the incentive expired. In September, leases accounted for roughly 71% of financed EV purchases1 — underscoring how pivotal the credit had become in sustaining demand.
With the credit now gone, leasing eased to around 60% in October 2025. While that marks a step down from the elevated levels of prior months, it still signals an overreliance on leasing. A truly balanced market would likely see lease penetration closer to 30%, but that’s difficult to achieve at this stage given ongoing consumer hesitancy around long-term EV ownership and depreciation. For now, leasing remains the most comfortable entry point for many shoppers, even as the market begins to wean its dependence on leasing overall.
At the same time, average transaction prices (ATPs) for new EV purchases climbed to $65,021, up from $60,167 in September, reflecting tighter discounting and a higher share of premium EV models. October’s ATP ranks as the second-highest on record, trailing only May 2023’s peak of $65,381. The uptick suggests that October buyers were less motivated by short-term deals and more confident in paying for the technology, performance and long-term value EVs offer.
