The EV lease returns are coming: How off-lease EVs will impact supply and demand

Two behavioral dynamics make off-lease customers especially appealing to OEMs and dealers, regardless of fuel type:

First, lease customers cycle faster (more “at-bats” for the market) — Sixty percent return to market in less than three years (36 months), compared with 47% of purchase households. Second, loyalty is stronger, especially at the brand level. Brand loyalty for those that lease is roughly 14 points above the industry average of about 50%. RTM brand loyalty is 64% for lease households versus 47% for households that purchase.

More frequent shopping means more opportunities. OEMs and dealers that can keep their own lessees at maturity can protect their market share more effectively and improve lifetime value. Additionally, the influx of used EV supply arriving in 2026 may find new demand from both “EV loyalists” as well as payment-driven shoppers seeking EV benefits at a lower entry price.

As 2023 EV leases mature, the used vehicle market is expected to see an influx of late-model, well-equipped EVs because leased units are generally newer, cleaner, and more standardized in trim and features. This increase will likely intensify price discovery pressures, especially as multiple model lines return and new-EV incentives —including OEM subvention — narrow the value gap between new and used vehicles. 

The resulting lower monthly payments could attract more buyers to EVs. However, there is pricing risk if retail monthly payments are not attractive enough to meet consumer expectations compared to new-EV payment offers. Off-lease EVs may remain unsold on dealer lots longer than comparable internal combustion engine vehicles, leading to margin erosion.

Despite the challenge of so many electric vehicle lease maturities, dealers can benefit from more late-model used inventory and increased repeat traffic as lease customers return sooner, which means more sales and service-to-sales orchestration opportunities.

As overall EV affordability improves with the introduction of off-lease inventory, the buyer base can expand, especially if the average lease payment remains competitive. To win these customers, marketers and dealers must balance retention and remarketing strategies, including:

• CRM programs. First-party data should be clean and actionable to identify near-term lease maturities and maintain or increase customer loyalty with offers on inventory that best match customer preferences.
• Affordable payments. Marketplace trends – like days’ supply and incentive offers – should be monitored closely to keep monthly payments competitive.
• Advanced targeting. Audience strategies that focus on lease cycle, monthly payment sensitivity and fuel-type loyalty segments can help boost conquest and retention programs and improve lead conversion.

Because 2023 marked a record milestone in EV registrations through high leasing, 2026 is set to bring a significant influx of off-lease EVs to retail. That wave will put pressure on pricing for used and EV inventory and test operational readiness — but it also creates a high-frequency, more loyal customer base that can be retained with effective CRM and conquest strategies.

Having a thoughtful inventory strategy and monitoring the average lease payment will be critical for dealers seeking to keep offers competitive and retain these high-value customers. Retailers and OEMs that treat electric vehicle lease maturities as a managed acquisition and retention system — rather than just an inventory event — will increase their market share as the used EV market evolves.