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The Future of EVs: “Greener” Pastures

Published: November 2, 2018 by Brad Smith

While still a relatively new and small segment, all signs point to a bright future for electric vehicles (EVs). Big name brands, including Jaguar and Mercedes-Benz, have announced new EVs hitting dealership lots all over the country. While it could take more than 20 years before EVs own a significant market share, there are four reasons why the auto industry should be enthusiastic about the electric vehicle segment’s future, including new business opportunities, growing market share, a budding loyal customer base and a commitment to sustainability by the auto industry.

New business opportunities

New tech innovations typically create innovative new jobs — and in the case of EVs, these jobs aren’t just for the folks on the assembly line. EV owners will need to charge their vehicles at home, so there will be increased demand for overnight charging. But, what about the EV owners while they are on the road? Charging stations dotting the roads like gas stations—or, even new innovations that could change the way we think about charging altogether—will start to become a reality.

For car dealers, service business will get a boost from the future influx of all-electric cars. No oil change? No problem. As NADA chairman Wes Lutz told reporters at a recent Automotive Press Association luncheon in Detroit, his dealership actually loses money on every oil change. EVs have tires, suspensions and electrical systems, which are among the most profitable service business for car dealers. As more EVs start to flood the streets, the possibilities for new business ideas to support this growing segment will be nearly limitless – both for dealers and other entrepreneurs.

Customer conquest can lead to growing market share

Dealers stand to profit from EV sales, as well. Wes Lutz again drove this point home in his APA presentation. There are more than 270 million gas-powered vehicles on the road. Dealers would be crazy not to want to sell EVs to replace every gas-powered car on the road. That would be a lot of new sales and money in the bank for savvy dealers.

Where can dealers find these customers? As we blogged about previously, individuals with higher education and high home values are currently more likely to purchase EVs. These individuals are also more likely to be found on the west coast. Smart dealers who do an EV data deep-dive can find segments fitting the EV customer profile. Using Experian demographic and psychographic data including Mosaic USA lifestyle segmentation, dealers can develop highly targeted marketing programs to get EV customers in to showrooms.

 EV Customers Show Propensity for Loyalty

Once dealers have customers in an EV, there’s a good chance they get them back again in the future. Electric Vehicle customers are showing early signs of being a highly loyal customer segment. When EV customers return to market, 62 percent buy another EV.

Tesla owners show an even higher make loyalty rate than EV customers as a whole. More than 4 in 5 Tesla customers — 80.5 percent – buy or lease another Tesla when they return to market. Tesla has the highest level of make loyalty in the industry, ahead of Subaru at 72.1 percent and Ford at 72 percent.

Environmentally Friendly

Ultimately, EVs will fulfill consumer demand for more environmentally friendly transportation. Most people prefer internal combustion engines because they are more affordable and have more utility than today’s EVs. But, as battery costs continue to come down, EV performance will more closely mimic today’s vehicles. All things being equal, customers are likely to opt for a more environmentally friendly option in the future and eventually, the scales will tip in the favor of EVs.

Despite its relatively small share of the market, there are many forces that could expedite the growth of the electric vehicle market in the near future. Dealers and manufacturers would be wise to keep a close on the data and trends to make the right decisions and find growth opportunities for the bottom line.

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Published: March 1, 2025 by Jon Mostajo, test user

Scott Brown, Group President at Experian, recently presented at Reuters Next on the power of AI innovation in financial services.

Published: December 13, 2024 by Brian Funicelli

Electric vehicle (EV) registrations are re-gaining momentum as a wave of more affordable models hit the market, pushing more consumers than ever to make the transition. According to Experian’s State of the Automotive Finance Market Report: Q3 2024, EVs made up 10.1% of new vehicle financing this quarter, increasing more than 30% from last year. Furthermore, 45% of EV consumers leased their vehicle in Q3 2024—resulting in EVs accounting for 17.3% of all new vehicle leasing. Of the top five transacted EV models this quarter, Tesla accounted for three—with the Tesla Model Y leading at 31.8%, followed by the Tesla Model 3 (14.3%) and Tesla Cybertruck (4.9%). Rounding out the top five were the Ford Mustang Mach-E (3.9%) and Hyundai IONIQ 5 (3.7%). Interestingly, data in the third quarter of 2024 found that consumers’ financing decisions vary based on the EV model they’re looking at. For example, 76.5% of consumers purchased the Tesla Model Y with a loan and 13.1% opted for a lease; on the other hand, only 8.5% of consumers bought the Hyundai IONIQ 5 with a loan and 78.7% chose to lease. Despite the rising interest in leasing as more incentives and rebate programs roll out, some consumers still prefer to purchase their EV with a loan. Understanding financing patterns based on different models is key for professionals as they cater to the diverse preferences and determine the long-term viability of certain EVs and their potential for leasing renewals. Snapshot of the overall vehicle finance market As the finance market continues to stabilize, it’s notable that the average interest rate for a new vehicle fell year-over-year, going from 7.1% to 6.6%, respectively. However, average new vehicle loan amounts increased $736 from last year, reaching $41,068 in Q3 2024, and average monthly payments went from $732 to $737 in the same time frame. On the used side, average interest rates saw a slight uptick to 11.7% in Q3 2024, from 11.6% last year. Meanwhile, the average loan amount dropped from $1,195 over the last year to $26,091 this quarter and the average monthly payment declined from $538 to $520 year-over-year. With the overall market shifting and EVs re-sparking interest, automotive professionals should leverage how consumers are purchasing their vehicles based on average payments and the fuel type as more incentives are being offered. Monitoring these insights can unlock opportunities for tailored financing solutions that meet the needs of consumers as preferences continue to evolve. To learn more about automotive finance trends, view the full State of the Automotive Finance Market: Q3 2024 presentation on demand.

Published: December 5, 2024 by Melinda Zabritski

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