Amidst a moderation in electric vehicle (EV) sales’ rapid pace, the share of new EV car registrations surged notably in the first half of 2023 to 8.3%, up from 5.6% a year earlier. According to a new TransUnion (NYSE: TRU) study conducted in collaboration with S&P Global Mobility, the credit profiles of EV buyers have remained robust as the EV market share expanded.
Mainstream EV buyers maintained an average credit score of 774 from Q2 2022 to Q2 2023, closely aligning with luxury EV and ICE model buyers. The study revealed that more than 60% of mainstream EV buyers fell within the super prime credit risk range, akin to the percentages seen among luxury car buyers—both ICE and EV.
Satyan Merchant, TransUnion’s Senior Vice President and Automotive Business Lead, noted, “Consumers are increasingly opting for EVs, and despite this growth, the credit profile of mainstream EV buyers remains stronger than that of their ICE counterparts, which is a crucial consideration for lenders assessing lending options and risk.”
Comparatively, mainstream EV buyers’ credit profiles mirrored those of luxury buyers, not only in credit scores but also in average APR and loan-to-value (LTV) ratios. The study highlighted a trend wherein mainstream EV buyers’ APR and LTV were more akin to those of luxury car buyers than traditional ICE vehicle buyers.
Furthermore, the study highlighted the potential impact of EVs on the leasing market. While leasing for mainstream ICE vehicles remained stagnant in the first half of 2023 compared to 2022 figures, non-luxury EVs experienced a surge in leasing, reaching 22% from a mere 9% in 2022.
Merchant emphasized, The surge in EVs might rejuvenate the leasing market, which has seen a decline in recent years. It’s a trend worth monitoring to gauge its potential influence on ICE vehicle trends.
