Electric Vehicle Financing Grew Significantly in Q4 2021

While many industry pundits are assessing how macroeconomic changes may impact the future of the automotive market, recent data suggests consumers tend to stick to specific fuel types. According to Experian’s Automotive Market Trends Report: Q4 2024, over the last 12 months, 77.5% of electric vehicle (EV) owners replaced their EV with another one, with 15.6% returning to gas-powered vehicles. Meanwhile, 82.2% of gas vehicle owners replaced it with the same fuel type, while only 4.7% made the switch to electric. It’s important for professionals to recognize that most consumers tend to replace their vehicles with the same fuel type. Additionally, knowing who is making these purchases and the types of vehicles being registered allows better anticipation for consumer needs and ultimately enhances the buying experience while fostering consumer loyalty. Breaking down fuel types by generation Through Q4 2024, Baby Boomers predominantly registered new gasoline vehicles, accounting for 74.7% of their choices, while 15.9% opted for hybrids and 6.6% chose EVs. Millennials showed a similar trend, with 69.2% registering gas vehicles, followed by 15.1% selecting hybrids and 12.5% choosing EVs. Gen Z also favored gasoline vehicles at 74.0%, with hybrids making up 14.3% and EVs at 9.1% of their registrations. Although gasoline vehicles account for the majority of new registrations, EVs and hybrids are steadily gaining ground, particularly among the younger generations who are drawn to advanced features that align with their preferences. This will likely play a role in shaping the future of vehicle registrations as more gas alternative models hit the market and consumers make the switch. To learn more about vehicle market trends, view the full Automotive Market Trends Report: Q4 2024 presentation on demand.

The electric vehicle (EV) market continues to see remarkable growth as both new and used registrations rise year-over-year. For the first time, new EVs accounted for 9.2% of all retail vehicle registrations across the U.S. in 2024, according to Experian’s 2024 EV Year in Review Report, and used EV registrations climbed to just over 1%, from 0.7% the year prior. As we dove into the data, we found that Tesla remains the dominant player in both new and used sectors; however, the shift in consumer preferences is extending across various manufacturers with more models hitting the market. For instance, Tesla accounted for 50.7% of new retail registrations in 2024, from 60.6% in 2023. Meanwhile, Ford increased from 4.7% to 6.2% year-over-year and Hyundai went from 4.2% to 5.4%. On the used side, Tesla made up 59% of retail registrations, from 60% in 2023, while Chevrolet grew from 7.1% to 9% and Nissan was at 5.4%, from 8.3%. As the EV market continues to grow, it’s not just the various manufacturers making waves; geographical trends are also coming into play in shaping how these vehicles are being embraced nationwide. While EV adoption is expanding well beyond the traditional EV strongholds, California still holds the highest number of registrations, with Los Angeles accounting for more than 180,000 new retail EV registrations, followed by San Francisco at 91,000+ and San Diego with more than 31,000. Hartford and New Haven, Connecticut experienced the highest growth in new retail EV registrations over the last five years, reaching 110.5% in 2024. Close behind were El Paso, Texas (with a 99% increase), and Colorado Springs, Colorado (with an 85.7% spike). These shifts highlight the rapid expansion of EV adoption across the country as we see more consumers in diverse areas opting for the fuel type. Analyzing and leveraging the broader range of registrations will help automotive professionals as they identify emerging markets to effectively tailor their strategies. To learn more about EV insights, visit Experian Automotive’s EV Resource Center.

Quick Summary: Leasing continues to increase in the electric vehicle (EV) market. EVs accounted for nearly 20% of all new vehicle leases in Q4 2024, up from only 2.11% of new vehicle leases four years ago in Q4 2020. With consumers looking for flexibility—both in monthly payment and model availability—we’re seeing leasing continue to surge in the electric vehicle (EV) market. According to Experian’s State of the Automotive Finance Market Report: Q4 2024, EVs accounted for 19.5% of all new vehicle leases this quarter, up from 11.7% last year and a substantial increase from 2.1% in Q4 2020. Diving a bit deeper, data found EVs accounted for 9.3% of all new purchases in Q4 2024. Of those EVs, 50.1% were leased, while 38.9% were financed through loans. With lease payments for EVs ultimately being more affordable compared to loans and the excitement of driving the latest models packed with advanced technology, it’s no surprise we’re seeing leasing grow in popularity. Top leased EVs: How do lease and loan payments compare? As more consumers transition to EVs and manufacturers introduce new options to their lineup, certain models have become top choices for those opting to lease. Tesla accounted for the top two leased EVs in Q4 2024, with Tesla Model 3 coming in at 12.2% and Tesla Model Y at 9.1%. However, the Honda Prologue followed closely at 8.8% this quarter. Rounding out the top five were Hyundai IONIQ 5 (6.9%) and Chevrolet Equinox EV (5.9%). It’s notable that leasing has traditionally been a value-driven option for consumers, and the same holds true in the EV market. Leasing continues to offer lower monthly payments, making the finance option stand out for those looking to test an EV before purchasing or simply wanting the latest model on the lot. In Q4 2024, the average payment difference between a loan and a lease was $175. Though, the average monthly payment to lease a non-luxury EV was $504 this quarter, noting a $205 difference compared to the $709 loan payment. By comparison, the average monthly payment between a loan and leased luxury EV was $98—coming in at $842 for a lease and $940 for a loan. As more consumers choose to lease EVs, automotive professionals in both new and used markets have a chance to capitalize on this trend. By leveraging this data, those in the new retail market can effectively reach the right audience, while those in the used market can stay ahead of the curve and prepare for the influx of off-lease models in the coming years. To learn more about automotive finance trends, view the full State of the Automotive Finance Market: Q4 2024 presentation on demand.