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Should You Buy an EV in 2026?
The $7,500 federal credit ended in September 2025, which changed what a smart EV purchase looks like. Here is where the value moved, what the real battery degradation data says, and why the range number on the window sticker is the wrong one to shop on.
- The $7,500 credit is gone for anyone buying now. It ended for vehicles acquired after September 30, 2025, along with the used and commercial versions.
- That pushed the value toward the used market. EVs shed 40 to 55 percent of their value in three years, so someone else has already absorbed the worst of it.
- Battery anxiety is mostly outdated. Real world data across 22,700 vehicles shows about 2.3 percent capacity loss a year and roughly 82 percent remaining after eight years.
- Running cost still favors electric by a wide margin, but only if you can charge at home. Heavy reliance on public fast charging erodes most of the advantage.
For most of the last decade the answer to this question was simple. A federal credit knocked $7,500 off the price, running costs were a fraction of gasoline, and the main thing to worry about was whether you could find a charger on a road trip. Two of those three things have changed.
Here is what the purchase actually looks like now, and where the value moved.
What expired, precisely
The One Big Beautiful Bill Act terminated the clean vehicle tax credits for any vehicle acquired after September 30, 2025. That is not one credit but three, and a fourth covering home charging equipment is on a slightly later clock.
| Credit | What it covered | Worth up to | Cut-off |
|---|---|---|---|
| Section 30D | New clean vehicle | $7,500 | Sep 30, 2025 |
| Section 25E | Used clean vehicle | $4,000 | Sep 30, 2025 |
| Section 45W | Commercial and leased | $7,500 | Sep 30, 2025 |
| Section 30C | Home charging equipment | $1,000 (30%) | Jun 30, 2026 |
The charger credit is the one row still worth acting on. If you are installing home charging, check the current date against that June 2026 deadline carefully, and budget the full cost if you are past it. We cover that in more detail on the EV charging cost calculator page.
What has not gone away is state and utility support. Rebates on chargers, reduced overnight rates for EV owners, and state purchase incentives all still exist in many places, and they are now the only incentives in play. They vary enormously by state and utility, so check yours specifically rather than assuming.
Why the value moved to the used market
Electric cars have depreciated faster than comparable gasoline cars, and that gap is the whole story of where the value went.
| Powertrain | Value lost in 3 years | Value kept |
|---|---|---|
| Electric | 40–55% | 45–60% |
| Gasoline | 35–45% | 55–65% |
That was mostly bad news while the credit existed, because it applied to new cars and pushed buyers toward the fastest depreciating end of the market. With the credit gone, the calculus inverts. A buyer today can let the first owner absorb the steepest part of the curve and buy the same car for roughly half price.
The depreciation gap is also narrowing as the used market matures and battery longevity data accumulates, so the discount available on a lightly used EV may not stay this generous indefinitely.
The battery question, answered with data
The fear that stops most used EV purchases is that the battery will fail and cost more than the car is worth. The real world evidence does not support it.
Geotab's 2026 analysis of more than 22,700 vehicles in service found an average degradation rate of about 2.3 percent per year, leaving roughly 82 percent of original capacity after eight years. Broader datasets put the normal range at 1.5 to 2.5 percent a year. Degradation is also not linear — most cars lose 3 to 5 percent in the first year or two, then the curve flattens considerably.
| Age | Typical capacity remaining | Range on a 250-mile car |
|---|---|---|
| New | 100% | 250 miles |
| Year 1 | 96% | 240 miles |
| Year 3 | 92% | 230 miles |
| Year 5 | 88% | 220 miles |
| Year 8 | 82% | 205 miles |
There is a floor under this as well. Federal rules require manufacturers to warrant the battery pack for at least 8 years or 100,000 miles, and most warranties pay out if capacity falls below 70 percent inside that window. A genuinely bad battery in that period is a warranty claim.
The one variable that matters is how the car was charged. Vehicles that lived on DC fast charging have degraded at roughly double the rate of vehicles charged mostly on AC at home, around 3 percent a year against 1.5 percent.
- Ask for a state of health reading. Most EVs report it through the service menu or a dealer diagnostic.
- Verify it independently with an app or a third party inspection rather than trusting the listing.
- Ask how it was charged. Mostly AC at home is the answer you want; a life on DC fast chargers is not.
- Check how much of the 8 year / 100,000 mile battery warranty is left, and whether it transfers to you.
Range: shop on your commute, not the sticker
Survey data keeps producing a strange result. Something like three quarters of prospective buyers say they would need 500 miles of range before considering an EV, which is more than almost any gasoline car delivers on a tank and far more than most people drive in several days.
The number that matters is not the maximum. It is whether the car covers your actual daily distance with margin, because a car charged at home starts every morning full. That is the opposite of a gas car, where you run a tank down and refill it. For a 40 mile daily commute, a car with 220 real miles of range is not marginal — it is a car you plug in twice a week.
Where range genuinely matters is the long trip, in cold weather, and at the end of the battery's life. Those effects compound:
| Condition | Range on a car sold as 250 miles |
|---|---|
| New, mild weather | 250 miles |
| New, cold weather (−20 to 30%) | 175–200 miles |
| Year 8, mild weather (82% capacity) | 205 miles |
| Year 8, cold weather | 145–165 miles |
Our EV range calculator lets you work from your own efficiency and conditions rather than the sticker, and the charging time calculator shows what a given charger actually delivers over a session.
The running cost case, and its one condition
At the national average of 18.44 cents per kWh, a reasonably efficient EV is dramatically cheaper to fuel than a gasoline car — and the gap compounds every year you keep it.
| Electric | Gasoline (30 mpg) | |
|---|---|---|
| Cost per mile | 5.3¢ | 13.5¢ |
| Per 1,000 miles | $53 | $135 |
| Per year (13,500 miles) | $711 | $1,827 |
| Over 8 years | $5,690 | $14,616 |
So should you buy one?
If you can charge at home and you drive enough miles for the running cost gap to compound, the case is still strong. It is simply a different purchase than it was two years ago. The subsidy that used to make a new EV competitive is gone, and the discount that replaced it lives in the used market instead.
- A two or three year old car, past the steepest depreciation and the fastest part of the battery curve.
- Battery warranty remaining, and a verified state of health above 90 percent.
- Charged at home overnight on the cheapest rate your utility offers.
- Range sized around your real commute, not an imagined road trip.
That buyer is getting most of what the credit used to provide, from depreciation someone else already paid for.
Common questions
Is there still a $7,500 federal EV tax credit?
No. The One Big Beautiful Bill Act terminated the clean vehicle credits for any vehicle acquired after September 30, 2025. That covers the new vehicle credit under Section 30D, the used vehicle credit under Section 25E, and the commercial credit under Section 45W. There was a narrow transition rule for buyers who had a written binding contract and a payment in place on or before that date, but for anyone shopping today the federal credit is simply gone.
How long do EV batteries actually last?
Longer than most people expect. Geotab's 2026 analysis of more than 22,700 real world vehicles found an average degradation of about 2.3 percent per year, with batteries retaining roughly 82 percent of original capacity after eight years. Federal rules also require a minimum battery warranty of 8 years or 100,000 miles, so a battery that fails early is a warranty claim rather than your problem.
Do EVs lose value faster than gas cars?
In the first few years, yes. Electric cars have generally lost somewhere around 40 to 55 percent of value over three years against roughly 35 to 45 percent for comparable gasoline cars. That gap is bad news if you buy new and sell early, and it is precisely why a two or three year old EV is often the strongest value in the market right now.
Should I buy a used EV instead of a new one?
For most buyers focused on cost, a used EV is now the better arithmetic. The first owner absorbed the steepest depreciation, the battery has already passed through the early phase where capacity drops fastest, and a meaningful part of the federal battery warranty usually remains. Check the remaining warranty term and ask for a state of health reading before you commit.
How do I check the battery health of a used EV?
Ask the seller for a state of health figure, which most EVs report through the service menu or a dealer diagnostic, and confirm it with an independent reading from an app or a third party inspection rather than taking the listing at face value. Also ask how the car was charged. Cars that lived on DC fast charging have degraded at roughly double the rate of cars charged mostly on AC at home.
How much does it cost to run an EV compared to gas?
At the national average of 18.44 cents per kWh, an EV doing 3.5 miles per kWh runs about 5.3 cents a mile. A 30 mpg gasoline car at $4.06 a gallon runs about 13.5 cents a mile. Over 13,500 miles a year that difference is roughly $1,116, though your own tariff and how much you rely on public fast charging can move it substantially in either direction.