Electric Vehicles Take Bigger Slice of Automotive Lending in Q4

The electric-vehicle share of auto financing roughly doubled in fourth-quarter 2021, compared with a year earlier, as EV offerings expand among the more mainstream brands and into more product segments, Experian Automotive says.

“The share got doubled year-over-year. Of course, that’s with a broader variety of vehicles and a bit more affordable price point,” says Melinda Zabritski, Experian Automotive senior director of automotive financial solutions.

The EV share of loan and lease originations in the fourth quarter was about 4.6%, vs. 2.3% in like-2020. Even with the increase, the Tesla brand still dominates the segment, and the average price point remains high for EVs, Zabritski tells Wards..

According to Experian, the average loan monthly payment for an EV in the fourth quarter was $744, up slightly from $738 a year ago. However, the trend for the last few years is toward lower payments on EVs. In fourth-quarter 2017, the average monthly payment for an EV was $977.

Average lease payments for EVs shows the opposite trend. At only $281 four years ago, lease payments averaged $688 in Q4 2021, almost as much as the overall average loan payment.

This probably reflects lower lease incentives, Zabritski says.

For the industry as a whole, the average new-vehicle monthly loan payment was $644 in Q4, up from $579 a year ago.

“With supply and demand what it is, incentives are kind of not needed,” she says. “Leasing is down overall.”

For the overall U.S. market, leasing accounts for 23.8% of new-vehicle originations in the fourth quarter, down from 27.7% a year ago. For EVs, leasing fell to a 27.7% share in Q4, down from 31.8% a year ago, Experian says.

Three Tesla models accounted for more than 75% of EV loans and leases in the fourth quarter: the Model 3, at 36.6%; the Model Y at 34.2%; and the Model S, at 5.3%. The Ford Mustang Mach-E, at 6%, and the Volkswagen ID.4, at 3.4%, account for the rest of the Top 5 most-financed EVs, Experian says.