New Q2 Automotive Consumer Trends Report: Electric Vehicles

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.

As the desire for flexibility and affordability continues to grow across the overall vehicle market, it seems the trend is carrying over into the electric vehicle (EV) space—resulting in more manufacturers rolling out new models as the number of consumers opting for the electric fuel type rises. According to Experian’s Automotive Consumer Trends Report: Q2 2024, non-luxury EV registrations grew to 26.6%, from 22.7% last year, while exotic and luxury declined from 77.3% to 73.4% year-over-year. Furthermore, of the 291.1 million vehicles on the road in Q2 2024, EVs accounted for over 3.5 million, an increase from more than 2.7 million last year. Historically, EVs were often viewed as luxury vehicles that offered limited model availability to choose from. Though, it’s notable that as more non-luxury models are introduced, the EV market share is witnessing a shift in consumer preference. For instance, Ford led the new retail non-luxury EV market at 21.9% in Q2 2024, from 24.0% last year. Hyundai increased from 15.2% to 19.3% year-over-year, Chevrolet decreased from 24.2% to 13.2%, Kia went from 9.2% to 12.5%, and Volkswagen declined to 11.2% this quarter, from 15.8% in Q2 2023. Consumers continue to embrace EVs While understanding the current EV market share allows automotive professionals to assist in-market shoppers more effectively, leveraging multiple data points allows for a more nuanced perspective while helping them prepare for the future as the market continues to evolve. It’s notable that 77.4% of EV owners replaced their current EV with another one in the last 12 months. Meanwhile, 16.2% transitioned to a gasoline fuel type and 3.2% switched to a hybrid. With the EV model lineup expanding, consumers are potentially intrigued by the new options or holding steadfast to a manufacturer. Regardless, the majority of current EV owners are remaining loyal to the fuel type. However, data found that 81% of households with at least one EV also own a gasoline-powered vehicle, 14% also own a hybrid, and 12% own an additional EV. There are a number of factors that can play a role in owning another vehicle alongside an EV—such as range anxiety or tasks that require a larger and more versatile vehicle—so having a secondary option allows consumers to maintain the flexibility to meet diverse transportation needs. To learn more about EV insights, view the full Automotive Consumer Trends Report: Q2 2024 presentation.

According to Experian’s Automotive Market Trends Report: Q1 2024, hybrids accounted for 11.8% of new vehicle registrations, an increase from 8.8% last year.