EV Market Expansion Increases Interest Among High-Credit Buyers

Explore the thriving EV market in the U.S., revealing impressive creditworthiness among buyers.

The EV market in the United States experienced substantial growth in the initial half of 2023. However, a recent study reveals that despite this surge, the average EV buyer continues to boast enhanced trustability.

Let’s delve into the findings of this study, conducted by credit authority TransUnion in collaboration with S&P Global Mobility.

Credit Strength Prevails in the EV Market

The comprehensive study spanning from the second quarter of 2022 to the same period in 2023 maintained a consistent narrative. Despite a 5.6% uptick in the U.S. EV market, the conclusions align with a 2022 report.

TransUnion’s insights persist—EV buyers consistently exhibit superior credit compared to their counterparts purchasing internal combustion cars.

The latest study discloses an average credit score of 774 for mainstream EV buyers. Remarkably, over 60% fall within the super prime credit risk range. The credit profile in question closely resembles that of luxury car buyers.

This applies to both electric vehicles and internal combustion engine cars. It differs significantly from the credit profiles of mainstream gasoline car purchasers, according to TransUnion.

Intriguingly, a mere 1% of mainstream EV buyers fall into the subprime risk category. This statistic mirrors the low credit risk observed in 1-2% of luxury car buyers, encompassing both EVs and internal combustion vehicles. In contrast, 5% of mainstream internal combustion car buyers find themselves in the subprime risk range.

Beyond credit metrics, the study sheds light on a noteworthy trend—the substantial growth in EV leasing. While the overall leasing market stagnated in the first half of 2023 for mainstream internal combustion vehicles, the EV segment experienced a remarkable surge. In 2023, 22% of mainstream EVs were hired, a substantial increase from the 9% recorded in 2022.

The $7,500 Commercial Clean Vehicle Credit

This surge in EV leasing is attributed to the $7,500 Commercial Clean Vehicle Credit, colloquially known as the EV tax credit loophole. This incentive enables automakers with captive hiring companies to claim a $7,500 credit, matching the federal EV tax credit for individual sales.

The resulting savings are then passed on to the customer, making EVs a more financially attractive option.

Implications for Dealers and the EV Market

This shift in the EV market could potentially reshape dealer attitudes towards EVs. With more customers boasting better credit entering showrooms, dealers might reconsider their stance on EVs. 

TransUnion and various experts advise that dealers could be overlooking valuable opportunities by not actively adopting electric vehicles. This encompasses a broader approach, including the provision of charging infrastructure, offering EV accessories, and implementing supportive measures within their business model.

Also, see: Used EV Market Flourishes with Remarkable Price Reductions

FAQs

1. Are EV buyers more likely to have better credit than those purchasing internal combustion cars?

Yes, the study reveals that EV buyers consistently demonstrate higher creditworthiness compared to buyers of internal combustion cars.

2. What percentage of mainstream EV buyers fall into the subprime credit risk category?

Only 1% of mainstream EV buyers fall into the subprime risk range, aligning with the low credit risk observed in luxury car buyers.

3. What is the driving force behind the surge in EV leasing observed in the first half of 2023?

The surge in EV leasing is attributed to the $7,500 Commercial Clean Vehicle Credit, commonly referred to as the EV tax credit loophole, providing automakers with a financial incentive to promote leasing options.

Please follow thetricenet.com for the latest information regarding various categories like Electric Vehicles, Mobile Phones, Product Reviews, and Artificial Intelligence.

Aliha Zulfiqar
Aliha Zulfiqarhttp://thetricenet.com
With a major in English Language and Literature, I'm a dedicated SEO Content Writer. Also, I love to write about technology. With over 2 years of experience, I've had the privilege of contributing to various renowned platforms. As I look forward to the future, I am committed to refining my work and delivering content that stands out.

Latest articles

Related articles

Leave a reply

Please enter your comment!
Please enter your name here

Verified by MonsterInsights