Mass-Market EVs Start To Show, But Early Buyers Are Still Upscale

Based on their credit behavior, electric vehicle buyers in the U.S. market still resemble the first wave of upscale EV buyers who can afford what amounts to a battery-powered luxury vehicle, according to a recent study from TransUnion, the Chicago-based credit bureau.

That’s significant because the eventual mass-market rollout of electric vehicles depends on thriftier, less-wealthy borrowers getting onboard the EV bandwagon, as more-affordable EVs hit the market.

So far, there’s a small but growing number of mainstream-brand and mainstream-priced EVs, from makes like Ford, Toyota, Hyundai, Kia, Subaru, Jeep, and Honda.

The TransUnion study said EVs accounted for 8.3% of U.S. new-vehicle sales in the second quarter of 2023, more than double 4% share in the third quarter of 2021.

“Many new models have hit the market,” said Satyan Merchant, senior vice president and automotive business lead for TransUnion, in a phone interview.

However, the credit profile of the mainstream-brand EV buyer continues to remain stronger than that of the mainstream-brand buyer of vehicles with an internal-combustion engine, he said.

More than 60% of mainstream-brand EV buyers in the study had credit scores in the “super-prime” segment, defined as credit scores above 780. That was in line with luxury-brand buyers, for both EVs and internal-combustion vehicles.

The average credit score for mainstream-brand EV buyers is 774, the study said.

At the same time, buyers with subprime credit, defined as credit scores 600 and below, made up 5% of mainstream-brand, internal-combustion buyers, but only 1% of mainstream-brand EV buyers, the study said. The subprime segment has a similar share among luxury brands, TransUnion said.