While the overall new vehicle market is down this year, electric vehicle sales continue to rise, benefiting credit unions responding to the market and creating openings for fintechs.
Cox Automotive said on Wednesday that while new car sales have fallen this year, sales of battery electric vehicles — which it calls “pure electric vehicles” — jumped to 196,788, a record high and a 13% increase from compared to the first quarter.
Americans purchased 370,726 new electric vehicles in the first six months of 2022, up 76% from the first half of 2021. Electric vehicle sales in the second quarter accounted for 5.6% of the total new vehicle market in the United States, compared to 2.7% a year earlier, according to Cox Automotive’s electrified light-duty vehicle sales report.
Redwood Credit Union, Santa Rosa, Calif. (7.6 billion in assets, 320,708 members) has offered a 0.25% loan rebate for qualifying hybrid and electric vehicles since the early 2000s.
Michelle Anderson, CLO for Redwood Credit Union, said interest in electric and hybrid vehicles has increased this year with rising gas prices, but they were increasing even before.
“Hybrid and electric vehicles are very popular and common in California, so we have had a constant interest in them for many years. Many Californians are environmentally conscious and choose to drive hybrid and/or electric vehicles,” Anderson said.
Redwood CU’s electric and hybrid vehicle loans represent a larger share of a growing balance sheet. NCUA data shows Redwood CU held $538.1 million in new car loans as of March 31, up 11.8% from a year earlier, and $949.3 million in used cars, up 14.3%.
Hybrid and electric vehicles accounted for 8% of the number of loans in 2020, 10.6% in 2021 and 14% in the first quarter, Anderson said.
Experian’s Auto Finance Market Report released in February showed credit unions generated 13.7% of new auto loans and leases of all types in the three months ending Dec. 31 and 12. .1% of electric vehicle financing.
The 0.25% discount applies to new and used vehicles. “Members also buy used products, often from friends and neighbors,” she said. “We live in an area where hybrid/electric vehicles are quite common.”
Cox Automotive said Tesla continues to dominate the market. The Austin, Texas-based company’s share of electric vehicles has grown from 67% in the first half of 2021 to 70% in the first half of this year.
However, Cox Automotive expects Tesla’s market share in the electric vehicle market to decline as other manufacturers ramp up production. There were 33 electric vehicle models for sale in the second quarter, up from 19 a year earlier.
The high prices allow Tesla’s dominance in the electric vehicle market to make it a force in the luxury market. “The average price of a new electric vehicle in June was over $66,000, well above the industry average and more in line with luxury pricing than traditional pricing,” according to Cox Automotive.
Along with higher gas prices and an eco-conscious membership, Redwood CU is cultivating more interest in electric vehicles through a recent partnership with local Tesla dealerships in the North San Francisco Bay Area in providing a concierge experience to its members and Tesla customers through co-hosted community events. provide private test drives.
“It generated a lot of interest,” Anderson said.
Redwood CU also has a brokerage service that allows it to help people find their ideal cars. “Hybrid/EV requests have increased significantly since the start of this year,” she said.
“We recently tested an outdoor ad promoting our hybrid/EV loans and saw a significant increase in traffic to the hybrid/EV page on our website,” she said.
For lenders who aren’t interested in electric vehicles or who see them as the same as other auto loans, a fintech startup called Tenet hopes to relieve them of the need to care.
On June 28, Tenet announced an online lending platform it claims lowers the cost of electric vehicle loans by rejecting “standard car amortization models.”
The New York fintech’s press release says it’s harnessing the residual value of electric vehicles, “which is far better than gasoline-powered cars.”
“Today’s traditional auto finance options fail to consider the long-term value that electric vehicles hold, leading to unnecessarily high monthly payments and a disconnect between smart financial decision and sustainable decision,” did he declare.
The company announced that it has raised $18 million in seed funding, led by Human Capital and Giant Ventures with participation from Breyer Capital, Global Founders Capital, Firstminute Capital and angel investors including Michael Tannenbaum, Gokul Rajaram and Michael Ovitz.
“While there have been huge innovations to improve the technology of the cars we drive, nothing has been done to improve the way we buy them. That’s where we come in,” its website says. .