电动汽车转型中的汽车金融

Auto Finance in the Electric Vehicle Transition

Introduction

Household finance plays a significant role in facilitating the transition to electric vehicles (EVs). Approximately 80% of new car purchases are financed through auto loans or leases. As of 2023, auto loans are the third largest category of consumer credit, following mortgages and student loans, accounting for over $1.6 trillion across 100 million loans.

Credit Risk and EVs

Credit risk is a key factor in the transition to EVs. EV owners might represent a selection leading to better credit risk, as they may be less susceptible to gas price shocks and have more predictable fuel expenses. However, EVs may depreciate more rapidly due to resale risk, potentially increasing the likelihood of default.

Data and Methods

The study uses more than 84 million monthly observations of loan performance from over 4 million auto loans in the United States from 2017 to mid-2023. The baseline underwriting model shows that EV borrowers default 29% less than internal combustion engine (ICEV) borrowers, resulting in $1,457 in lender savings.

Key Findings

1. Credit Risk and Default Rates: EV borrowers default 29% less, with a back-of-the-envelope estimate of $1,457 in lender savings.
2. Gas Price Shock Exposure: A prolonged higher gasoline price regime could lead to ICEV borrowers defaulting by up to 83%.
3. Interest Rate Differences: EV borrowers pay 2.2 percentage points lower interest rates, equivalent to $2,711 in foregone payments. This lower rate is only observed for captive lenders, suggesting strategic motives by manufacturers rather than a passing along of credit risk value.
4. ABS Market Knowledge: The ABS market is aware of the lower credit risk, leading to $233 in savings for the ABS issuer.
5. Non-Underwriting Selection: The study uses a differential shock exposure by treatment model to disentangle selection from post-treatment exposure to differential costs of running an EV.

Conclusion

The study highlights that auto finance costs differ by engine type, with EVs presenting lower credit risk and potentially lower interest rates. The findings suggest that lenders are not fully passing along the value of reduced credit risk to borrowers, and that the ABS market recognizes the lower risk, leading to savings for issuers.

Acknowledgments

The authors thank Siddhartha Lewis-Hayre and Grace Chuan for research assistance and appreciate discussions from Thomas Klier, David Low, Jordan Nickerson, and Miriam Schwartz. They also thank seminar and conference participants and technical experts Will McLennan and Cole Langois.