Buying a new electric vehicle remains a major financial stretch, if not cost-prohibitive, for most Triad consumers.
According to consumer automobile research group Edmonds, the retail price for a basic 2023 model EV — such as a Smart EQ, Nissan Leaf, Mini Hardtop 2 and Chevrolet Bolt — can range from $23,900 to $31,000, while a basic Tesla Model 3 goes for about $47,000.
Meanwhile, a “super luxury” EV, such as a Porsche Taycan 4A, goes for $187,000 — a large down payment on a three-bedroom, two-bathroom single-family home in the Triad.
Yet, several banks and credit unions serving the Triad are plugging in EV loan pitches with interest rates as low as 1.99%.
For example, Truist Financial Corp. recently launched an email campaign to customers with the tagline, “EV financing that’s always up to speed” at 3.38% APR for those “with excellent credit.”
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The bank’s hook is appealing to consumers who are “tired of high gas prices” with the benefits “of going electric … that’s better for the planet and great for your wallet.”
Truist said in a statement that “as EV demand and production continues to grow in the U.S., EV loans continue to make up a proportional, but growing segment of Truist’s direct (online, in branch) and indirect (dealerships) auto loan originations.”
Truist said it “uses the same underwriting criteria for EVs as we do for traditional, internal combustion engine vehicles.”
“The new marketing campaign is to raise awareness with clients of the financing available, low interest rates, quick loan decisions — including same-day funding in many cases — and an easy user experience so our clients can secure an EV auto loan when and how they prefer.”
Meanwhile, Bank of America Corp. is offering car loan rates of 4.24% APR for a new EV, 4.44% for a used EV — both through a dealership — and 5.19% for refinancing.
“Driving an electric vehicle means you would be contributing to environmental sustainability since electric vehicles release fewer harmful carbon dioxide emissions,” Bank of America said on its website.
“EVs may even be recharged using renewable energy, which can help increase energy independence.”
Bank of America said part of its campaign is a reflection that EVs “have become more affordable as technology improves and automobile manufacturers meet the increased demand with additional electric vehicles models in the market.”
There are about 60 different EV models available in the North American marketplace.
“In addition, the number of charging stations is growing every year to provide more options for your travel needs,” Bank of America said.
Wells Fargo & Co. said that its Wells Fargo Auto unit “is the leading lender of new electric vehicles.”
“We work with nonprofit organizations to help raise awareness and understanding of the benefits of EVs.
“This support takes the form of sponsoring special events like National Drive Electric Week, as well as educational webinars for consumers and dealers.
“It’s one of the many ways Wells Fargo is working to bring its commitment to sustainability to life,” the bank said.
According to Argonne National Laboratory, Americans purchased a record-high number of both hybrid and plug-in vehicles in February with hybrid purchases up 10.2% year over year, while plug-in purchases rose 11.7%.
The main impetus for emphasizing EV production and car loans appears to be an executive order that President Joe Biden signed in August 2021 stating that half of all new vehicles sold in the U.S. should be electric by 2030.
The executive order has spurred automobile manufacturers, such as Ford, General Motors and Stellantis (which owns Chrysler and Fiat), to make investments in EV production plants to meet the 2030 goal.
The Triad and Carolina Core’s economies and workforces will benefit significantly from the EV push from two recent economic-development announcements.
Toyota Motor North America Inc.’s planned $1.29 billion electric battery production plant is expected to have 1,750 employees when production begins in 2025 at the Greensboro-Randolph Megasite.
Toyota Battery Manufacturing N.C. will build lithium batteries for hybrid and electric vehicles. A second production phase could generate an additional 4,500 to 5,000 jobs.
At $4.7 billion, the second phase could become the largest economic development project in state history.
Meanwhile, North Carolina’s decadeslong quest to secure an automobile manufacturer finally came to fruition with Vietnamese electric vehicle startup VinFast‘s plans for a $4 billion campus within a 1,977-acre megasite near Sanford.
The first phase will represent a $2 billion capital investment. The manufacturer would create at least 7,500 jobs from 2023 to 2027 at an annual average wage of $51,096.
VinFast would produce a seven-passenger full-size SUV and a five-passenger mid-sized model — and electric battery components at the plant.
The plan is to start production in July 2024 with the goal of building about 150,000 vehicles annually in phase 1 and about 200,000 annually at full production.
Elsewhere in the Southeast, Volkswagen last week began production at a Chattanooga, Tenn., plant of its first EVs assembled in the U.S.
According to the Associated Press, the plant is projected to produce 7,000 cars per month of its ID.4 electric compact SUV by the fourth quarter. Volkswagen has hired more than 1,000 production employees where it already had a workforce of more than 4,000.
On July 22, Georgia and local governments in Savannah agreed to give Hyundai Motor Group incentives worth $1.8 billion to build electric vehicles in the state.
According to AP, the company announced in May it will invest $5.5 billion in its first U.S. plant dedicated to EVs. It’s the largest economic development deal in Georgia’s history, with a promise of creating 8,100 direct jobs.
Supply and demand
For Triad consumers interested in an EV, there are plenty of local dealerships to choose from, according to the Electricforall website www.electricforall.org/certified-dealers/.
Most Flow Automotive and Modern Automotive dealerships are listed as certified EV dealers on the website. Neither corporation could be reached for comment on consumer demand for EVs.
However, continuing supply-chain challenges for EV manufacturers are limiting the local availability and product choice.
“New car sales continue to be constrained, as there are not enough new cars to satisfy demand,” said Ken Elkins, senior vice president for lending with Allegacy Federal Credit Union.
In recent years, both Allegacy and Truliant Federal Credit Union have emphasized low interest rates on new and used car loans to attract consumers and potentially new members.
“We have not seen much demand for pure EV yet,” Elkins said.
“The expense of these models puts it out of reach for many people. EV sales in the second quarter of 2022 are dominated by Tesla, Mach E, Audi and Rivian, all very expensive vehicles and just a very small fraction of the overall market.”
Stan Cross, electric transportation policy director for the Southern Alliance for Clean Energy, said that although EVs represent just 5% of new car sales, a recent Consumer Reports study found that 36% of consumers “are definitely or seriously considering buying an EV for their next car.”
“EV manufacturer investment is expanding exponentially to meet the demand, and the Southeast is leading the nation in capturing industry investments and job growth,” Cross said.
“By the end of 2021, the Southeast had captured $23.2 billion in EV manufacturing and supply-chain investment, representing 43% of total investments nationwide, as well as 23,569 jobs, 33% of the nationwide total.
“So far in 2022, North Carolina inked a $4 billion/7,500 jobs deal with VinFast and Georgia a $5.5 billion/8,100 jobs deal with Hyundai.”
Cross said that if the Inflation Reduction Act being negotiated in Congress passes as written, “there will be an upward of $7,500 tax credit for new EVs and $4,000 for used EVs.”
“Those tax credits, along with the $5 billion in highway corridor fast charging funded by the Bipartisan Infrastructure Law, will further entice consumers to buy an EV.”
The state of North Carolina offers two primary non-financial incentives to EV owners.
The first is that EVs are exempt from emissions inspection requirements.
The second is that qualified EVs and fuel cell electric vehicles may use N.C. HOV lanes regardless of the number of occupants. That exemption expires Sept. 30, 2025.
According to Duke Energy’s EV incentive website page, EVs typically require less maintenance than conventional vehicles because: the battery, motor and associated electronics require little to no regular maintenance; there are fewer fluids, such as engine oil, that require regular maintenance; brake wear is significantly reduced due to regenerative braking; there are far fewer moving parts relative to a conventional gasoline engine.
“The most regular maintenance you’ll be required to do with an electric car is replacing the windshield wipers and tires,” the utility touted.
Duke Energy recently introduced a customer program — www.duke-energy.com/home/products/ev-complete/charger-prep-credit — that will help pay for any electrical upgrades a residential home needs in order to get an EV charger.
“The EV Charger Prep Credit will pay up to $1,100 to cover the costs of preparing your home for a charger,” Duke Energy spokesman Randy Wheeless said. “The interest has been very positive.
“We are working on additional programs to present to the N.C. Utilities Commission soon, such as where Duke Energy handles to installation and maintenance of an EV charger at your home.
“We are also installing around 200 public EV charging stations around the state to help make charging more accessible to all. Many of those will target rural and low-income areas.”
Bank of America points to www.energy.gov for federal and state tax credits or incentives, the U.S. Energy Department’s Alternative Fuels Data Center and Electric Cost Drive Calculator.
Bankrate’s website includes several options for qualifying for a “green auto loan designed for zero-emission vehicles, often featuring lower interest rates or other perks.” Those loans also can be available for hybrid cars with lower average emissions.”
Online financing options include CleanEnergy Credit Union, EV Life and PlugStar.
Bankrate said the best green vehicles have a SmartWay designation, a score awarded by the U.S. Environmental Protection Agency to the lowest-emitting vehicles for each model year.
“Many lenders use this designation as a measurement to determine whether your car qualifies for a green auto loan for lower rates,” according to Bankrate.com.
“Green auto loans incentivize shoppers to consider these environmentally friendly vehicles by offering interest rate discounts, extended repayment terms and other benefits. By doing so, these loans make green vehicles more affordable for borrowers.
“Because green vehicles can be expensive, many lenders also offer longer repayment terms — such as up to seven years — than with conventional auto loans to bring down the monthly payment.”
Reynolds American Inc. said last week that as part of its Environmental, Social & Governance (ESG) goals, it will trade out more than 1,800 vehicles in its trade and operations fleet to hybrid and electric models.
That includes at least 50 light-duty operations vehicles at its North Carolina and Tennessee production facilities.
In 2022, about 650 hybrid and electric vehicles will replace internal combustible engine vehicles organization-wide.
The switch will happen on a rolling basis over the next three years, resulting in a projected annual 1000-plus ton reduction in carbon emissions, the manufacturer said.
“Our sales and trade marketing representatives average nearly 27,000 miles a year in their territories across the 50 states — that’s a lot of time on the road,” said Ed Mirana, senior vice president of National Sales and Strategic Accounts at Reynolds.
“With this move to hybrid vehicles, our sales and operations teams are driving progress on our sustainability ambitions.”
Reynolds is collaborating with Ford Pro to add its Escape SEL Hybrid, Explorer Limited Hybrid, Ford E-Transit and Ford-150 Lightning.
“We have a bold global ambition for carbon-neutral operations by 2030, and reducing carbon emissions in our fleet is an important step on this journey,” said Bernd Meyer, Reynolds; executive vice president of Operations.
“By 2024, more than 95% of all industrial vehicles used in Operations will be electric.
“With these significant changes and investments over the next few years, we are currently on track to meet a fleet carbon emission reduction of 50% by 2025.”
Things to consider
NerdWallet cited several perks for buying a EV, such as access to carpool lanes, free charging and free parking.
NerdWallet recommends leasing over buying an EV at this stage of EV development.
“EVs depreciate quickly, 52% in three years, according to Car and Driver,” the financial advocacy group said.
“If you purchase an EV and want to sell after, say, five years, you will have lost more money than with a gas car. The technology is evolving rapidly, so your EV will be outdated in three years.
“Some EV batteries lose their ability to fully recharge after a few years.”
Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, said consumer demand for EVs won’t reach critical mass “until we get the infrastructure easily available for fast recharging.”
“The way forward will be plug-in hybrid electric vehicles that allow you to switch between an all-electric battery and a smaller internal combustion engine for longer trips.
“The car manufacturers are pushing these because the federal government has been cranking out incentives as a carrot and cranking up fuel efficiency standards as a stick but electric vehicles of all types still accounted for only around 5% of the overall new car sales last year,” Madjd-Sadjadi said.
Madjd-Sadjadi predicts that “the majority of customers in the near future will end up buying electric vehicles, not because they are actively looking for them, but rather because of the greater number of offerings at more attractive prices.”