EV Market Tsunami: Lease Returns Flood Dealers as Gas Prices Skyrocket!
A surge of leased electric vehicles is returning to dealerships, creating a unique market opportunity as rising gas prices fuel renewed EV interest. This article explores how experts like Jimmy Douglas of Plug Motors are helping both dealers and consumers navigate this booming used EV market, highlighting the potential for significant deals.
The automotive market is currently facing a significant shift, primarily driven by a "tsunami" of leased electric vehicles (EVs) returning to dealerships. This influx, estimated at nearly 1 million EVs leased between 2022 and 2025, is largely a result of the Inflation Reduction Act. This legislation enabled dealers to offer a substantial $7,500 incentive to consumers who chose to lease rather than purchase an EV, leading to half of all EVs leaving dealerships in 2023 being leased models.
With most EV leases running for 24 to 36 months, the industry is now witnessing a massive increase in lease returns. Projections from J.D. Power anticipate a 230 percent jump in lease returns in 2026, while Cox Automotive forecasts over 600,000 lease expirations across 2027 and 2028. This surge includes the expiration of many "killer deals" from the fall of 2025, which were offered before the $7,500 EV incentive was discontinued, and will mature 36 months later in 2028.
Initially, dealers expressed panic regarding the low perceived demand for these used off-lease EVs. However, a recent shift in market dynamics has transformed this challenge into a significant opportunity. With gas prices rising again due to renewed conflict with Iran, interest in electric vehicles has experienced a resurgence. This presents a tremendous opportunity for both dealerships to move inventory and for consumers looking to enter the EV market with a used model.
To navigate this evolving landscape, experts like Jimmy Douglas, founder of Plug Motors, a marketplace dedicated to the used EV market, are offering valuable insights. Douglas brings extensive experience to the table, having spent five years at Tesla, where he served mostly as the general manager of its used car operations. His background at Tesla directly informs the vision and opportunities he sees in building a specialized marketplace for pre-owned electric vehicles. Douglas provides critical perspectives on current market trends and advises both dealers and EV-curious shoppers on how to find the best deals.
Beyond his focus on EVs, Douglas is also a notable automotive connoisseur and collector, having amassed a collection of 30 cars before the age of 30. He also shares a "Testarossa-red hot take" on the controversial Ferrari Luce, further showcasing his broad passion for automobiles.
This article is penned by Edward Loh, a seasoned writer and automotive enthusiast whose journey into the car world began in his youth. Loh recalls accompanying his dad to dealerships, quizzing salesmen on horsepower and 0-60 times while collecting glossy product literature, with a Mitsubishi Eclipse GSX booklet being a particularly memorable item. His parents, immigrants from Hong Kong, instilled a love for cars through family vehicles like a 1973 Super Beetle, a 1976 Volvo 240, a 1977 Chevrolet Caprice Classic station wagon, and a 1984 VW Vanagon. His father further cultivated this passion with sports cars and fast sedans, including a 1981 Mazda RX-7, a turbo diesel Mercedes-Benz 300D, and an '87 Porsche Turbo.
Loh's personal driving history began with his mother's 1991 Toyota Previa, leading to a perfect score on his driving license test. He then inherited his brother's 1986 Celica GT-S, though this privilege was short-lived due to speeding tickets, leading him to a 1983 Toyota 4x4 (Hilux). This rugged vehicle served him through college at USC, where he worked for the Daily Trojan and earned a biology degree with a business minor.
After a stint as a science teacher for Teach for America, Loh transitioned to freelance photography, following his passion. He eventually joined a small tuning magazine in Orange County, covering the "Fast and the Furious" subculture, and rose to editor-in-chief within three years. During this period, he owned a 1989 Nissan 240SX and a 1985 Toyota Land Cruiser (FJ60) for hauling gear. His career progressed to a mainstream car magazine, where he encountered numerous press cars. Subsequently, he became editor-in-chief of the now-defunct Sport Compact Car, learning from Angus MacKenzie before joining Motor Trend as a senior editor in 2007, a role he has cherished ever since.