Key Takeaways
The Iran war and sustained high US gasoline prices are driving a surge in used electric vehicle prices, with Cox Automotive's Manheim Used Vehicle Value Index for EVs jumping 12% in June from a year earlier — the biggest monthly increase since the index launched.
"The conflict in the Middle East has fundamentally altered the calculus for car buyers," said Jonathan Smoke, chief economist at Cox Automotive. "Every dollar at the pump pushes more consumers toward EVs, and that demand is now showing up in wholesale auction prices."
The Manheim index, which tracks prices of used vehicles sold at US wholesale auctions, recorded the 12% year-over-year gain in June 2026. The increase marks a sharp reversal from the depreciation trend that dominated the used EV market through much of 2024 and early 2025, when prices fell as Tesla and other manufacturers cut new-vehicle prices.
Gasoline prices in the US have climbed more than 25% since the start of the Iran conflict, according to AAA data, pushing the national average above $4.50 a gallon. The energy shock has prompted 113 countries to adopt at least one energy policy response, the International Energy Agency reported, with 55 nations adjusting fuel taxes and 32 adding or expanding fuel subsidies.
Why Used EVs Are Gaining Value
The price dynamics reflect a structural shift rather than a temporary spike. Used EVs typically depreciate faster than internal combustion vehicles because of battery degradation concerns and rapid improvements in new EV technology. But the Iran war has inverted that pattern: higher fuel costs make gasoline vehicles more expensive to operate, while the limited supply of new EVs — constrained by battery material shortages and production bottlenecks — pushes buyers into the used market.
Tesla's Model 3 and Model Y, which account for roughly half of all used EV transactions in the US, have seen the largest price increases, according to auction data. Ford's Mustang Mach-E and Chevrolet's Bolt EV have also gained, though at a slower pace.
The trend benefits automakers with strong EV lineups while creating headwinds for legacy manufacturers still reliant on internal combustion sales. Tesla shares have gained 18% since the start of the conflict, outperforming the S&P 500's 3% decline over the same period. Rivian and Lucid have also seen their stock prices rise as investors bet on accelerated EV adoption.
Risks on the Horizon
The rally in used EV prices carries risks. If the Iran conflict de-escalates and gasoline prices fall, used EV values could reverse sharply, leaving recent buyers with negative equity. Auto loan delinquencies have already ticked higher in recent months, and a correction in used EV prices could amplify those losses.
Cox Automotive expects used EV prices to remain elevated as long as gasoline stays above $4 a gallon. "The floor has moved up," Smoke said. "But this is a demand shock driven by geopolitics, not a structural improvement in EV economics. When the shock fades, prices will normalize."
This article is for informational purposes only and does not constitute investment advice.
