Electric Vehicles Sales to Outpace Market ‘for the Foreseeable Future’: Cox Projects. Some credit unions try to plug into the trend with special offers.

By Jim DuPlessis | April 21, 2023 

Source: AdobeStock.

Electric vehicles sales are growing far faster than those for cars with internal combustion engines, and some credit unions are giving members breaks to finance them.

Last year, Americans bought 762,883 electric vehicles, 65% more than in 2021 and three times more than the 230,761 sold in 2019, according to the CleanTechnica website.

This year, Cox Automotive forecast new car sales will rise 2.9% to 14.2 million, while electric vehicle sales will surpass one million, which would represent a 35% gain. In the first quarter, electric vehicle sales were 258,882, up 42% from a year earlier.

Electric vehicles accounted for 7.2% of sales of new cars and light trucks in the first quarter, up from 5% a year earlier and 0.7% five years earlier.

In an April 12 news release, Cox Automotive said its analysts believe EV sales growth rates will exceed the market “for the foreseeable future.”

“Many analysts talk about tipping points in the industry when volume quickly accelerates. Considering automaker investments and future product plans on the table, that tipping point may well be fast approaching, if not already here,” Cox Automotive said.

Interest in electric vehicles has been spurred this year by up to $7,500 in federal tax credits available starting this year under a provision of President Biden’s Inflation Reduction Act. The credits apply to vehicles assembled in North America and are subject to other limits.

Another factor helping electric vehicles is price. They peaked in mid-2022, and have been falling since then.

In the first quarter of 2018, a new electric vehicle cost $66,369 — 83% more than the $36,314 for all new vehicles. That price premium fell to 31% by last year’s first quarter. The average transaction price for a new electric vehicle in this year’s first quarter was $59,688, 23% higher than the $48,640 for all new vehicles.

There’s even a tiny used EV market developing. In the first quarter, 42,753 used EVs were sold by dealers, representing 1% of the market. Used EV sales have risen from 19,407 in 2021’s first quarter (0.4%) to 32,292 (0.7%) in 2022’s first quarter.

While some credit unions see no difference between electric and non-electric vehicles, some are telling members about special lending offers on their websites.

For example, South Carolina State Credit Union (SCU) of Columbia ($1.3 billion in assets, 85,358 members) will include up to $1,500 for a home charging station in a loan for a plug-in hybrid or an electric vehicle.

Many credit unions offer discounts of 25 to 50 basis points on electric vehicle loans. They include:

• Shrewsbury Federal Credit Union, Shrewsbury, Mass. ($204.3 million in assets, 9,213 members)
• Express Credit Union, Seattle ($19.6 million in assets, 3,256 members)
• Philadelphia Federal Credit Union, Philadelphia ($1.6 billion in assets, 121,791 members)
• Parsons Federal Credit Union, Pasadena, Calif. ($284.4 million in assets, 10,246 members)
• Wescom Central Credit Union, Pasadena, Calif. ($5.6 billion in assets, 218,218 members)

When Wescom Credit Union announced its 25-basis-point Green Vehicle Loan discount in January, Jeff Smrcka, vice president of consumer lending, said it allowed the credit union to both promote sustainability and save members money.

“We know that many of our members – particularly our millennial and Gen Z members – are concerned about the environment, so offering this corresponding loan discount is an additional way we can assist them in living their values every day,” Smrcka said.

Logix Federal Credit Union of Burbank, Calif. ($9.6 billion in assets, 237,710 members) calls itself “Southern California’s EV Loan Expert” on its website. It said EVs account for more than 10% of vehicles financed at Logix. It said Experian found it financed one in 200 loans for new electric vehicles in the first half of 2022, making Logix one of the top 20 new EV lenders in the nation in that period.