Small Credit Unions Get A Big Charge Out Of EV Lending

Financing alternatives for electric vehicles make mission sense for two cooperatives in Denver and Seattle.

 
 

Top-Level Takeaways

  • EV/hybrid sales are rising but are still a small part of total auto sales.
  • Express Credit Union offers EV/hybrid loans as part of its affordable products mission. Clean Energy Credit Union offers them as part of its core mission of promoting sustainability.

Sales of new light-duty electric vehicles (EV), both hybrids and fully electric, doubled in the United States from 2020 to 2021, according to the U.S. Department of Energy.

Those 608,000 vehicles were a tiny portion of the 14.9 million or so total units sold in the country that year, but EV sales are expected to continue rising as models, charging stations, and, now, price of gasoline, grows.

Credit unions of all sizes are offering special loans for EVs. Some are combining marketing with mission to offer financing within the context of their own purpose as a member-owned financial services cooperative.

Express Credit Union ($18.6M, Seattle, WA) and Clean Energy Credit Union ($31.5M, Englewood, CO) are two such organizations.

No Marketing To Millionaires

Express Credit Union is a Community Development Financial Institution (CDFI) that emphasizes both the green and affordability attributes of EVs. Elizabeth Escobar, chief business officer at Express, says her shop is working with two initiatives — Plug In America and EVs for Everyone — to provide the subject matter expertise for the loan program the credit union launched in 2018.

Elizabeth Escobar, Chief Business Officer, Express Credit Union

“We want to help bring awareness to EV ownership, break down the myths and misconceptions around EV adoption, and bring education and information about cost savings and environmental benefits to low-income communities,” the business officer says.

The 3,252-member cooperative currently has approximately 20 EV loans on its books. Those account for roughly $670,000 of a total auto loan portfolio of about $12.5 million. The credit union is currently offering 0.50% discounts on EV loans up to $50,000, with rates as low as 2.49% for a new vehicle and 2.99% for a used car.

According to Edmunds, there are 10 plug-in electric and hybrid cars sticker priced less than $50,000 in the 2022 model year for new cars, ranging from $27,400 for a Nissan Leaf to $46,990 for a Tesla Model 3.

CU QUICK FACTS

Express Credit Union
Data as of 03.31.22

HQ: Seattle, WA
ASSETS: $18.6M
MEMBERS: 3,252
BRANCHES: 1
12-MO SHARE GROWTH: 4.7%
12-MO LOAN GROWTH: 3.3%
ROA: 5.90%

“We want to help our members understand you don’t need to be a millionaire to drive an EV,” Escobar says. “The used EV market has many affordable options. Paired with cost savings of less maintenance and no gas, it’s a perfect solution for a low-income family.”

Lack of inventory has slowed adoption, and demand for the loans remains low, but the program has stirred conversation with members, Escobar says.

“People are open to considering converting to EV ownership,” she says. “It just comes down to qualifying for financing and to having more charging options here in the South Sound.”

Express doesn’t have loans specifically for home charging stations, Escobar says, but members can use personal loans for that purpose.

Express Credit Union offers flyers in English and Spanish to advertise its electric vehicle loan program. See it in Spanish, too.

A Green Portfolio With Emerging Models

Clean Energy Credit Union is based further east in the Denver suburbs, but the online-only cooperative has a nationwide membership that comprises primarily sustainable energy organizations.

Terri Mickelsen, CEO, Clean Energy Credit Union

The credit union does include chargers in its hybrid/EV loan program, and members can borrow up to 110% of the value of the vehicle for that purpose. Clean Energy also offers a green home improvement loan that can include financing for an EV charger or updating a home’s electrical system for home charging, says the Colorado cooperative’s CEO, Terri Mickelsen.

Clean Energy has had an EV loan program since its chartering in 2017. It also offers solar, geothermal, and electric bicycle loans, says Mickelsen, who joined the organization as a consultant in 2016 and became its CEO in September 2017.

“Our mission is to create a world where everyone can participate in the clean energy movement,” Mickelsen says. “Our EV loan program helps us accomplish that by providing members with affordable financing for new and used electric vehicles across the country.”

CU QUICK FACTS

Clean Energy Credit Union
Data as of 03.31.22

HQ: Englewood, CO
ASSETS: $31.5M
MEMBERS: 5,800
BRANCHES: 2
12-MO SHARE GROWTH: 50.7%
12-MO LOAN GROWTH: 71.3%
ROA: 2.66%

The 5,800-member cooperative has originated approximately $6 million in nearly 200 EV loans in an overall loan portfolio that now totals roughly $22 million. Mickelsen says March was one of the credit union’s busiest months for EV loans, and the CEO expects to see that activity continue to grow.

“We’re seeing applications increase as more car manufacturers enter the market,” she says. “We’ve financed EVs from a growing list of manufacturers such as Tesla, Ford, Volvo, BMW, Honda, and the new Rivian.”

Experience. Convenience. Environment.

Although gas prices are currently top of mind for many members, Mickelsen says that’s not the only reason she sees buyers making the switch to electric vehicles.

“They’re also motivated by experience, convenience, and environmental concerns,” the CEO says. “As the technologies continue to improve and range is extended, and as the infrastructure for electric charging stations continues to be built, EVs will continue to gain in popularity.”

Escobar also sees a win-win beyond saving on gas for EV borrowers at her Seattle credit union.

“We want our target market — low-income families — to receive the benefit of a rate discount most of all,” she says.

 

Children of a Clean Energy Credit Union member pose with their family’s EV car at a charging station. Check out the flyer that lays out the terms of the cooperative’s EV loans.

According to Escobar, everyone who finances an EV with Express helps the credit union serve its mission and supports the programs it provides to underserved communities.

“Getting your EV auto loan with Express directly supports the mission and members we serve,” the chief business officer says. “You’re being socially responsible with your money and can make great impact, more than you may realize.”

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