The Tool Desk
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What the EV downturn actually means in 2025–2026
The latest global data do not support a single worldwide sales collapse. The International Energy Agency (IEA) reported that electric-car sales topped 20 million in 2025, up 20% from 2024, and represented 25% of new cars sold worldwide. In that report, “electric car” includes battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs) unless the IEA specifies otherwise.
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| Market | 2025 result | How to interpret it |
|---|---|---|
| Global | More than 20 million electric cars sold, up 20% year over year | Growth continued overall; this is not a global demand collapse. |
| Europe | 4.2 million electric cars, up more than 30% | Demand expanded, although individual countries and models varied. |
| China | Largest EV market; sales increased | Strong volume does not prevent price and resale-value pressure. |
| United States | About 1.5 million, slightly below 2024; Q4 sales were 45% lower than Q4 2024 | The annual result and the fourth-quarter shock are different measurements. |
The IEA attributes the US pattern partly to policy changes and purchases brought forward before federal tax credits expired. Those are findings about 2025, not a forecast for all of 2026. A buyer in one country should therefore avoid treating another region’s sales chart as a prediction of local prices.
Why new-EV prices are falling in major markets
In 2025, the IEA found that sales-weighted average BEV prices fell by more than 10% in China, around 6% in Germany and nearly 2% in the United States. The figures are inflation-adjusted averages for the markets covered by the report. The IEA links the changes to battery costs, the number and mix of available models, and automaker pricing strategies.
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| Market | Average BEV price change in 2025 | Measurement qualification |
|---|---|---|
| China | More than 10% decrease | IEA sales-weighted average; not a forecast for every model. |
| Germany | About 6% decrease | IEA sales-weighted average; Germany is not a proxy for all Europe. |
| United States | Nearly 2% decrease | IEA sales-weighted average; model mix affects the result. |
These are manufacturer suggested retail prices (MSRPs), including VAT, purchase taxes and dealer mark-ups, but excluding purchase subsidies and registration taxes. MSRP also excludes dealer rebates and discounts, so a reported average decline is not the same as the discount you will receive on a particular vehicle. A lower average can reflect a cheaper model mix as well as a cut to an unchanged model.
What price competition means for a new-car buyer
- Compare the final transaction price, financing, taxes and incentives rather than relying on MSRP alone.
- Check whether a manufacturer has changed equipment, battery size or trim availability; a lower average price may reflect different vehicles being sold.
- Ask how a discount affects an existing owner’s resale position. A new-car price cut can reset used-market expectations for the same model.
- Do not assume that a national average applies to your state, province or country.
How lower new-car prices affect used-EV resale value
Used-EV values are influenced by both the price of a comparable new vehicle and the balance between used supply and demand. When a new model becomes cheaper, a used example generally has less room to command a high price. That effect is not automatic or identical for every model: scarcity, mileage, condition, incentives, battery warranty and local demand can outweigh a broad market trend.
Europe
Across five European markets studied by the IEA, BEV retention fell from about 50% in 2022 to 35% in 2025. Retention for the overall market also declined, from around 60% to 50%. The comparison reflects the final month of each year; monthly sales volumes were unavailable for every market, and the chart could not adjust for the average age of vehicles sold.
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United States
US BEV resale values were volatile. They had outperformed the overall used-car market in 2022, then fell sharply in 2023 after new-EV price cuts. By the end of 2025, BEV resale values were roughly 25 percentage points below the overall used-car market. The IEA identifies the 2025 US retention values as estimates because data were unavailable, so they should not be treated as a precise valuation for a specific vehicle.
China
For three-year-old electric cars in China, retention was about 46% in 2024 versus around 55% for the broader used-car market. By late 2025, average BEV and PHEV retention had fallen to 42%, while the overall used-car market was just above 50%. Rapid battery-technology advances, concern about battery health and the potential cost of major repairs are among the factors the IEA associates with weaker older-EV values. These figures are China-specific.
How to estimate the risk for one used EV
Market averages cannot replace a vehicle-specific assessment. Before buying or selling, assemble the following information for the exact model and trim:
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- Local comparables: Check completed-sale or credible asking-price data for the same year, trim, mileage and equipment in your market.
- Battery evidence: Request a documented battery-health measurement, not merely the dashboard’s estimated range. Ask whether the test covers usable capacity, fault codes and charging performance.
- Warranty: Confirm the battery and high-voltage-system warranty’s expiration date, mileage limit, exclusions and transfer terms.
- Condition and history: Review accident, flood, salvage and repair records. A repaired battery enclosure or underbody impact can change risk substantially.
- Technology and charging: Verify charging standards, onboard-charger operation and whether the vehicle supports the charging network you use.
- Repair exposure: Obtain model-specific estimates for battery, power-electronics and diagnostic work in your area.
A professional pre-purchase inspection is especially valuable when battery-health documentation is missing or the car has been in a collision. No market statistic can establish the value of an individual vehicle without its age, mileage, condition and warranty status.
Service costs: routine maintenance versus collision repair
Two different cost questions are often mixed together. Routine maintenance covers scheduled servicing and normal wear. Collision repair covers accident damage, including structural, sensor, battery and electrical work. Evidence that supports lower routine maintenance does not prove that crash repairs are cheaper.
Routine maintenance
A 2026 European Commission staff working document, summarizing underlying studies, says BEVs generally require fewer and less costly maintenance operations than comparable internal-combustion-engine (ICE) vehicles. Electric drivetrains eliminate or simplify several common wear items, so there is no equivalent schedule of engine-oil changes, spark-plug replacement or exhaust-system service. Tires, brakes, suspension, climate systems, cabin filters, wipers and software-related service still apply.
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The same Commission document says electrification shifts some repair work toward batteries, power electronics and software-based diagnostics. Those jobs may require specialized equipment and trained technicians, and their cost can be high even though they are less frequent than routine ICE maintenance.
Collision repair
Mitchell’s Q2 2026 repairable-collision-claims analysis shows a different pattern:
| Region | BEV average repairable severity | ICE average repairable severity | Reported gap |
|---|---|---|---|
| United States | USD 5,684 | USD 4,955 | USD 729 |
| Canada | CAD 6,645 | CAD 5,411 | CAD 1,234 |
Mitchell describes these gaps as narrowing across all model years. The figures are averages for repairable collision claims in the second quarter of 2026, not routine-service bills, an individual repair quote or the cost of a total loss. They also should not be generalized to countries outside the United States and Canada.
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Why an EV crash can cost more to repair
- High-voltage batteries and their enclosures may require special inspection after an impact.
- Power electronics, wiring and thermal-management components add diagnostic steps.
- Advanced driver-assistance sensors may need calibration after body repairs.
- Fewer shops and technicians may be qualified for high-voltage work in some areas.
- Parts availability and manufacturer procedures can extend repair time.
Insurance pricing reflects local claims experience, vehicle design and repair networks. Do not infer your premium or deductible from an industry-wide average.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the downturn means for different owners
If you are buying a new EV
- Use the lower-price environment to compare total transaction costs, not just list prices.
- Separate a temporary incentive from a permanent MSRP change.
- Ask how long the quoted price and financing terms remain valid.
- Consider likely depreciation, but do not choose a vehicle solely on a regional average.
If you are buying a used EV
- Depreciation can improve affordability, but rapid price cuts on new cars can produce another step down in used values.
- Prioritize battery-health proof, remaining warranty and service availability over a low odometer reading alone.
- Price the car against local listings with the same battery size, trim, mileage and accident history.
- Budget for specialized diagnostics and confirm where high-voltage repairs would be performed.
If you already own an EV
A market-wide retention decline does not change the car’s daily utility or automatically require selling. Keep maintenance records, preserve battery-warranty documents and repair collision damage through a qualified facility. If you need to sell, obtain more than one local valuation and disclose battery condition accurately; a documented healthy battery can distinguish your car from otherwise similar listings.
What owner satisfaction data do—and do not—show
JD Power’s 2026 US EVX Ownership Study announcement quotes EV practice executive director Brent Gruber saying: “EV market share has declined sharply following the discontinuation of the federal tax credit program in September 2025, but that dip belies steadily growing customer satisfaction among owners of new EVs.” The study surveyed 5,741 owners of 2025 and 2026 model-year BEVs and PHEVs between August and December 2025 and focuses on the first year of ownership.
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That result is useful context, not proof that every shopper is satisfied or that used-EV values will recover. It covers first-year owners, specific model years and a defined survey period rather than all EV drivers, all countries or long-term repair costs.
Limits you should apply to every forecast
- Regional sales can move in opposite directions; a US decline does not describe Europe or China.
- Average BEV prices are not model-level forecasts and do not equal negotiated transaction prices.
- Retention percentages vary with vehicle age, market mix and the supply-demand balance.
- The IEA’s 2025 US retention figures are estimates, and its comparison uses year-end observations without adjusting for average age of sales.
- Collision-claim severity is not routine maintenance spending.
- No reviewed evidence establishes one future price path or the resale value of a specific car.
The safest interpretation is practical rather than predictive: expect wider variation between models and markets, verify the condition of any individual battery, and keep purchase, service and resale decisions tied to local data.
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