We’ve all heard that sales of electric vehicles (EVs) have slowed over the past few months. While General Motors, Rivian and Toyota recently posted upbeat EV deliveries for the second quarter, EV manufacturers still face a bumpy road ahead. Demand for EVs has grown more slowly than expected due to high borrowing costs, economic uncertainty and consumer preference for gasoline-electric hybrids.
So, I was really interested to learn what some lenders are doing to boost their EV market share. In oil-focused Oklahoma, Tinker Federal Credit Union is offering EV buyers a 0.25 percent reduction in loan rates on both new and refinanced vehicle loans, with no prepayment penalties. In a post on its website, the bank encourages customers to “get behind the wheel of [a] green vehicle and enjoy better fuel efficiency, less pollution and lower loan rates.” This approach is in direct opposition to other lenders who are charging higher interest rates for EV loans.
According to research from the University of Pennsylvania Wharton School of Business, EV buyers face tighter financing terms compared to those who purchase conventional vehicles. EV auto loans are financed with higher interest rates, lower loan-to-value ratios, and shorter loan durations. Lenders tend to price in the risks they perceive in obsolescence caused by rapid advances in EV technology, leading to a steeper depreciation in value and reduced resale value.
