Through nine months of the year, sales of new electric vehicles are up nearly 70%, as dealers have moved an estimated 576,408 new EVs, according to Kelley Blue Book.

But in the used EV market, the turning point may come in January — which is when the Inflation Reduction Act of 2022 goes into effect.

The act, also referred to as IRA, includes the first-ever tax credits for used electric vehicles, according to Recurrent, a company that analyzes EV range.

Here’s the thing, though: most used EVs would not currently qualify, Recurrent explains in its Q4 2022 Used Electric Car Market Report.

The IRA stipulates that that qualifying used EVs be at a maximum price of $25,000. Only 12% of listed EV inventory fit that criteria, Recurrent said, and 17% of used EV sales in the third quarter met that threshold.

“Going into 2023, we expect that many vehicles on the cusp of the $25,000 eligibility level will be nudged down to attain tax credit eligibility, growing this market percentage,” Recurrent said in the report.

The Recurrent Price Index monitors pricing of select popular used EV models from the 2017 through 2019 model years. The index is currently at $37,597.77, which is 2.9% lower than where it was in July, the company said.

Used EVs on the lower end of the pricing spectrum have been steadier than the index’s movement.

“I’m not surprised to see the softening of the higher end of the used EV market — it reflects what’s going on in the broader economy,” Recurrent CEO Scott Case said in the report. “Vehicles priced under $25K, however, should hold steady between now and the start of the used EV tax credit in January.”

The overall used EV price is at $42,700 currently and has been steady since March, the company said.

Recurrent explains that the higher overall average price (when compared to index) is due to an overall younger population for EVs: at time of resale, used EVs have an average age of 4; for internal-combustion engine vehicles, the average is 6.47 years old, the company said.

But here’s another silver lining: used plug-in hybrids also qualify for the IRA credit.

Recurrent found that the average overall price on a used PHEV is $18,486, and that 31% of these vehicles meet the act’s pricing requirements. And when looking at all the used vehicles that are priced under $25,000, half are PHEVs, Recurrent said.

At least in the new market, high prices don’t seem to be impacting consumer demand, anyhow. Going back to the KBB data, new EV prices climbed 9.7% year-over-year last month, reaching $65,291.

“Electrified vehicles continue to be the darling of the industry, with the growing marketplace and consumer interest now reflected in record sales numbers,” KBB executice editor Brian Moody said in a news replease. “While EV prices currently align more closely with luxury versus mainstream, the market continues to grow and evolve with more choices hitting the scene all the time. It’s no longer just ‘which Tesla is available,’ but rather an industry-wide boom with more EVs on the horizon from Ford, GM, Hyundai, and other manufacturers.”

Be it new or used, the EV market appears headed for a pivotal moment

“The U.S. electric car market is on the verge of an inflection point,” Case, the Recurrent CEO, said in a news release. “If we get this right, and the bill works as intended, the EV targets and combustion engine bans for 2035 look suddenly timid.”