Newly Registered Electric Vehicle Market Share Expected to Reach 40% by 2031; Distinctive Buying Patterns Emerge for this Group
Rhea-AI Summary
TransUnion has released a study indicating that electric vehicle (EV) market share is projected to rise from 5% in 2021 to 40% by 2031. Conducted with S&P Global Mobility, the study reveals that EV buyers tend to have stronger credit profiles compared to traditional internal combustion engine (ICE) buyers, securing lower interest rates and making larger down payments.
Additionally, EV buyers show a significant preference for online shopping and financing, with 36% indicating they prefer to research and complete financing online, compared to 16% of ICE buyers.
Positive
- EV market share expected to grow significantly, from 5% in 2021 to 40% by 2031.
- EV buyers have higher average credit scores (775) compared to ICE buyers (735).
- Lower average APR for EV buyers at 2.8%, compared to 4.3% for ICE buyers.
- EV buyers show a lower delinquency rate, with 0.72% for EV vs 0.92% for ICE mainstream buyers.
Negative
- None.
News Market Reaction 1 Alert
On the day this news was published, TRU gained 1.89%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
TransUnion study compares electric vehicle and traditional internal combustion engine buyers
CHICAGO, July 20, 2022 (GLOBE NEWSWIRE) -- Newly registered electric vehicle market share is expected to grow from
For the purposes of this research, only fully battery-powered electric vehicles (EV) are included, and not plug-in hybrids. Traditional internal combustion engine vehicles (ICE) include gasoline, diesel and ethanol vehicles. The study also accounted for luxury and mainstream vehicle types. Approximately
“Consumer interest in electric vehicles from Tesla, Ford, Nissan and others is only going to grow in the next decade and meeting the unique demands of these buyers will become a business imperative for auto dealers and lenders,” said Satyan Merchant, senior vice president and automotive business leader at TransUnion. “Our research clearly shows that electric vehicle buyers have excellent credit risk profiles, but this group also has varying preferences, including a larger appetite in shopping around for vehicle financing by digital means.”
Credit Profile of Electric Vehicle Buyers
TransUnion’s study observed the credit risk of both EV and ICE buyers. The average credit scores for EV buyers – both those purchasing mainstream or luxury vehicles – was greater than all ICE buyers. As well, EV buyers secured lower interest rates for their car purchases. This was partly due to having better credit risk profiles and because they have lower loan to value (LTV) rates than typical ICE buyers. Loan-to-value is a ratio that is determined by dividing the amount borrowed (including sales tax, title and licensing fees) by the total cost of the vehicle.
EV Buyers Generally Have a Stronger Credit Profile and Make Larger Down Payments
| Car Buyer | Average Credit Score | Average APR | Average LTV |
| ICE Mainstream | 735 | ||
| EV Mainstream | 775 | ||
| ICE Luxury | 769 | ||
| EV Luxury | 775 | ||
Controlling for credit quality, both mainstream and luxury EV buyers have lower serious delinquency rates versus mainstream and luxury ICE buyers. For instance, the 60+ days past due rate after 12 months for mainstream loans originated in 2020 was
“It’s clear that electric vehicle buyers have a stronger credit risk profile than consumers who purchase traditional autos,” said Eric Kohn, co-author of the study and vice president in TransUnion’s automotive business. “In fact, credit performance as measured by serious delinquency rates for mainstream electric vehicle buyers more closely resembles traditional luxury buyers. This points to the overall electric vehicle market being both less risky for lenders as well as a more competitive marketplace in securing consumers’ business.”
Electric Vehicle Buyers Conduct More Online Shopping
TransUnion’s study also included a survey of 1,480 U.S. vehicle owners for their thoughts on electric vehicles and financing. The survey found that consumers who own or are considering purchasing an EV are more interested in online car shopping and financing experiences.
More than one-third of EV owners (
As for understanding financing and monthly payments and completing financing, there was an even more dramatic shift in online use for those owning or considering EVs versus all other auto owners. Approximately
“Electric vehicle owners and considerers are far more likely to want to understand what they can afford online and they are more likely want to complete financing online. Online prequalification at the start of the shopping process will help lenders capture more EV buyers. As a result, end-to-end digital retailing in partnership with dealers will be critical for lenders,” concluded Merchant.
A Quick Guide about the study and information on what auto lenders can do to identify, target and capture EV consumers can be found here.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®.
A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.
http://www.transunion.com/business
| Contact | Dave Blumberg |
| TransUnion | |
| david.blumberg@transunion.com | |
| Telephone | 312-972-6646 |
FAQ
What is the projected market share growth of electric vehicles by 2031?
How do the credit profiles of EV buyers compare to ICE buyers?
What percentage of EV buyers prefer online car shopping?
What is the average APR for EV buyers based on the recent TransUnion study?
