The electric vehicle market experienced a dramatic shift in October, entering what Edmunds analysts are calling a “reset era.” After a record-setting sales surge in September driven by the expiring $7,500 federal tax credit, the market is now adjusting to its new reality. October’s data provides a clearer picture of an industry transitioning away from the late summer incentive-driven urgency and toward more sustainable, organic demand.
A Market Finding Its Balance
Leasing has long been a primary driver of EV growth, largely thanks to the federal tax credit that made it an affordable entry point for many consumers. In September, this trend reached its peak, with leases accounting for approximately 71 percent of financed EV purchases at dealerships.
With the credit now gone, leasing activity naturally cooled. In October, lease penetration fell to around 60 percent. While this is a notable step down, it still indicates a significant reliance on leasing compared to the broader auto market. The data suggests that for many shoppers, the lower commitment and reduced risk of a lease remain appealing, even without the extra financial incentive. This is especially important for a vehicle type that is constantly seeing new technology and improved batteries. Leasing allows customers to upgrade to a new EV without getting stuck with an older model.
At the same time, the average transaction price (ATP) for a new EV climbed to $65,021 in October, a sharp increase from $60,167 in September. This is the second-highest ATP on record, signaling a shift in the buyer mindset. The data suggests that October’s buyers were less motivated by deals and more committed to the value of EV technology, performance, and long-term ownership.
Evolving Buyer Behavior and Inventory Pressures
The expiration of the tax credit also reshaped how consumers are paying for their vehicles. With fewer incentives promoting leasing, a greater number of shoppers turned to alternative payment methods. According to Edmunds, cash and outside-financed purchases made up 23.2 percent of EV transactions in October, nearly double the 12 percent seen in September. Affordability pressures and changing incentive structures are directly influencing buyer behavior.
Simultaneously, dealerships faced new inventory challenges. The September sales rush left many dealer lots with leaner EV stock than they had midyear. With available inventory roughly half of what it was, the market shifted from one of high supply and deep discounts to one of tighter supply and firm pricing.
Shopper Interest Better Than Expected
Despite the end of the federal credit and rising transaction prices, consumer interest in EVs has not disappeared. Edmunds data shows that EV consideration on its site saw a modest decline, dropping from a peak of 12.7 percent in early September to 9.0 percent by mid-October. This indicates a market normalization rather than a collapse in interest.
Many prospective buyers are likely taking their time now that there isn’t an incentive deadline to contend with. While immediate sales may cool, long-term interest in electrification remains intact, creating an opportunity for automakers and dealers to focus on education and value.
The coming months will be a critical period for the EV market. Success will depend on the ability of brands and retailers to communicate the benefits of EV ownership beyond temporary incentives. By focusing on total cost of ownership, charging education, and a wider range of attainable models, the industry can build a more grounded and sustainable market for future EV buyers.
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