TLDR: Over 300,000 EVs will return from lease in 2026, up 200% from 2025, with residual values running 10–15 percentage points below original lease assumptions.
Three hundred thousand electric vehicles are coming home from lease in 2026. Most of them are worth far less than anyone assumed when the paperwork was signed.
The Scale of the Wave
The numbers, reported by CDK Global, represent a 200% increase from the approximately 123,000 EV lease returns projected for 2025. The spike reflects the surge in EV leasing during 2022 and 2023, years when federal tax credits, manufacturer incentives, and peak EV enthusiasm drove consumers into three-year lease agreements. Those agreements are now maturing into a very different market.
The expiration of the $7,500 federal EV tax credit, slower-than-expected EV demand growth, and a broader used market awash in inventory have fundamentally changed the value equation for returning vehicles.
The Residual Value Gap
This is where the pain concentrates. Leases written in 2022 and 2023 were underwritten with residual value assumptions of approximately 50%, meaning a $50,000 EV was expected to be worth roughly $25,000 at lease end. The reality, per NETSOL’s analysis, is closer to 35–40%. EVs are retaining roughly 40% of their original value, creating a 10–15 percentage point gap between what captive finance arms assumed and what the market will actually pay.
That gap translates directly to losses. Captive finance arms, the lending subsidiaries of OEMs, are absorbing the difference and sending more vehicles to auction rather than remarketing them at retail. Every vehicle that goes to auction at a loss is a line item that flows back to the parent company’s balance sheet. European auction data has already shown the same dynamic playing out across the Atlantic.
The Dealer Opportunity, for Those Who Prepare
There’s a flip side. For dealers already navigating a low-traffic environment, 300,000 returning leases represent the largest affordable EV inventory opportunity the market has ever produced.
A used EV at 35–40% of its original MSRP is a very different value proposition than a new one at full sticker. For consumers who were priced out of the new EV market, these lease returns could be the entry point, provided dealers invest in the knowledge and infrastructure to sell them confidently.
The wave is coming regardless. The Manheim Used Vehicle Value Index hit 210.5 in January, its highest level since September 2023, but that’s an aggregate figure driven by ICE vehicles. EV-specific wholesale values are under downward pressure that 300,000 additional units will intensify.
For dealers willing to learn the EV reconditioning playbook and manage the range anxiety conversation on the used lot, 300,000 returning leases aren’t a crisis. They’re inventory.
