As electric vehicle owners are becoming more satisfied with at-home recharging capability, more consumers are financing the acquisition of an EV.
But as these trends continue, at least one expert is cautious about the capacity of the U.S. power grid to handle EV charging to go with the demands already placed on it because of heating, air conditioning and other major home appliances.
That’s the summation of information shared recently by Experian, J.D. Power and the University of Texas at Austin.
According to Experian’s newest State of the Automotive Finance Market report released on Thursday looking at the fourth quarter, the percentage of electric vehicles being financed is growing at a rapid pace
Experian tabulated that EVs comprised 4.56% of new-vehicle financing in the fourth quarter, up from 2.25% in Q4 2020 and 1.34% in Q4 2019.
While gasoline vehicles continue to dominate new-vehicle financing, Experian noted that there has been growth in multiple alternative fuel vehicle segments, which comprised 15.91% of new vehicle financing in Q4 2021, up from 11.8% in Q4 2020. This includes electric plug-in/gas, flex fuel, and hybrids, in addition to EVs.
Focusing on EV financing, the Experian data showed consumers are more likely to purchase a new EV than lease it, with 72.3% of new EV financing being installment contracts and the remaining 27.7% being leases.
Analysts determined the majority of new EV financing is originated by banks (55.72%), followed by captives (29.81%) and credit unions (12.14%).
Experian added that the average monthly payment for a new EV was $774 in Q4 2021, which is a slight uptick from Q4 2020, when it was $738.
“The exponential growth in electric vehicle financing shows us just how prominent this fuel type is becoming, bringing additional context to the industry buzz,” said Melinda Zabritski, Experian’s senior director of automotive financial solutions.
“Understanding the landscape of financing will be helpful for lenders and dealers to understand consumer preferences and make informed decisions as more models continue to be introduced,” Zabritski continued in a news release.
Experian indicated two Tesla models made up the most financed new EVs in Q4 2021: the Tesla Model 3 at 36.62% and the Tesla Model Y at 34.18%.
Rounding out the top five were the Ford Mustang Mach-E at 6.02%, the Tesla Model S at 5.3% and the Volkswagen ID.4 at 3.4%.
J.D. Power study on home chargers & more
Whether the person acquired a Tesla, Ford, VW or a model from another OEM, J.D. Power acknowledged a brighter spotlight also will shine on home chargers.
And the J.D. Power 2022 U.S. Electric Vehicle Experience (EVX) Home Charging Study released on Thursday gave an inkling about where the situation stands at present.
The study showed satisfaction is highest among electric vehicle (EV) owners for Level 2 portable chargers and Level 2 permanently mounted home chargers, each garnering overall satisfaction scores of 752 (on a 1,000-point scale).
J.D. Power recapped that the study measured EV owners’ satisfaction in three charging segments:
— Level 1 portable
— Level 2 portable
— Level 2 permanently mounted charging stations.
Analysts explained that satisfaction is measured across eight factors, all of which provide a comprehensive assessment of the owner experience and charger performance, including:
— Fairness of retail price
— Cord length
— Size of charger
— Ease of winding/storing cable
— Cost of charging
— Charging speed
— Ease of use
J.D. Power determined there is a 188-point gap in overall home charging satisfaction between EV owners who use a Level 1 charger (564) and those using a next-level Level 2 charger (752).
Analysts said satisfaction improved the most year-over-year — 11 points — among EV owners using a Level 2 portable charger, while Level 1 satisfaction declined 10 points from the 2021 study.
“Home charging is an important aspect of owning an EV and taking that to the next level by utilizing a Level 2 charger is key to optimizing the ownership experience,” said Brent Gruber, senior director of global automotive at J.D. Power. “When upgrading to Level 2 charging, some home electrical upgrades may be necessary. Making those changes will mean faster charging and result in a far more satisfactory EV ownership experience.
“With battery ranges increasing, it makes sense for many owners to make the upgrade if they haven’t already,” Gruber continued in another news release. “All parties involved in the EV marketplace need to pay special attention to home charging since 84% of owners regularly charge at home.”
Other key findings of the 2022 study included:
• Charging performance has notable effect on satisfaction: The gap in satisfaction with charging speed is 361 points — a year-over-year increase of 9 points — going from a low of 326 for Level 1 portable chargers to a high of 687 for Level 2 permanently mounted chargers. This is exacerbated by the difference in speed of charging importance to overall satisfaction between Level 1 portable chargers (27%) and Level 2 permanently mounted chargers (15%).
• Satisfaction with cost varies by location: The regional gap in satisfaction with home charging costs among owners of Level 2 chargers is 162 points, ranging from a low of 632 in the New England region to a high of 794 in the Mountain region. The Pacific region has the second-lowest level of satisfaction with cost (719), with California (689) having the lowest satisfaction score in the Pacific region.
• Preconditioning can improve satisfaction: Preconditioning a vehicle — warming or cooling it with the HVAC system while the vehicle is charging — is a new metric in the study this year. Satisfaction scores among owners of Level 2 permanently mounted chargers who say they always precondition their vehicle averages 794, while satisfaction among those who say they never precondition their vehicle averages 753. For owners of Level 2 portable chargers, overall satisfaction is 795 among those who say they always precondition their vehicle and is 745 among those who say they never precondition their vehicle.
• Upgrading to Level 2 requires owners to take action: Three-fourths (75%) of EV owners said at least one component upgrade was needed to complete the home installation of a Level 2 charger. The most common upgrades are wiring (55%); outlet (45%); and electrical panel (28%).
• Many EV owners unaware of utility programs: Only 40% of owners with Level 1 home charging and 52% of those with Level 2 charging know if any EV programs are offered by their local utility. Satisfaction is higher when EV owners utilize a program through their utility, such as charging during off hours at lower rates; financial incentives for a Level 2 installation; or itemized costs for EV usage.
“We’re on the verge of EVs approaching mainstream owners who are price conscious,” Gruber said. “The industry needs to be sensitive to the incentives beyond the purchase of the vehicle — and making sure owners are aware of them.”
The J.D. Power study also examined the home-charging experience of EV owners across all three charger segments, but only Level 2 permanently mounted charging stations are award eligible.
Tesla ranked highest among Level 2 permanently mounted charging stations with a score of 797. ClipperCreek ranked second with a score of 758. The segment average is 752.
J.D. Power highlighted that the U.S. Electric Vehicle Experience (EVX) Home Charging Study, now in its second year, is driven by a collaboration with PlugShare, a leading EV driver app maker and research firm.
Survey respondents for the study included 8,216 owners of 2016 through 2022 model year BEVs and PHEVs. The study was fielded in October and November.
Looking at the power grid
Javad Mohammadi is an assistant professor with the Cockrell School of Engineering at The University of Texas at Austin. Mohammadi’s research focuses on addressing the resiliency and decarbonization needs of the electric grid and electrified mobility systems.
In an analysis sent to Auto Remarketing, Mohamaddi discussed the expansion of America’s electric grid for EVs.
When it comes to broader deployment of electric vehicles in America, Mohamaddi explained what role will expansion of the electric grid play for those vehicles.
“Accessibility and reliability of our charging infrastructure are the keys to promoting electric vehicle deployments. This means that we need to have a resilient electric grid that can feed electric vehicles when and where it’s needed,” Mohamaddi said. “Also, having an efficient electric grid is critical to delivering clean energy to charge electric vehicles and reduce our carbon footprint.”
Mohammadi then identified what he believes are the key challenges for expansion of the electric grid for EVs.
“Our electric grid is aging and is not well-prepared to deal with disasters and weather issues. So, we need to modernize this infrastructure to deal with climate shocks and keep up with the growing energy demand,” Mohamaddi said. “The future of our energy grid will, for the most part, rely on its ability to store energy. So, electric vehicles could be a part of the solution because they are effectively batteries on the wheel, meaning that they can store energy and discharge it when needed.
“The main question here would be how to incentivize and manage an army of small batteries like individual batteries and electric vehicles to help the grid at time of need,” he continued.
Mohammadi recapped what progress has been made so far in expanding the grid for EVs.
“As manufacturers are betting big on EVs, the expectation is that our electric grid should keep up,” he said. “And there is a consensus that we need to invest in our electric infrastructure, and we need to have a modern electric system.
“Our decision-makers have started to rethink the role of Electric Vehicles in the future of our electric grid and develop plans and strategies for better integration. But these efforts need to accelerate,” Mohamaddi continued.
Finally, Mohammadi shared his recommendation for how the U.S. should move forward to expand the electric grid for EVs.
“We need to think holistically and consider transportation electrification in the broader context of our energy transition,” Mohamaddi said. “We need the right policies in place to incentivize EV adoption and encourage EV owners to help the grid in times of need.
“And addressing these questions is critical as we are upgrading our grid and building our charging infrastructure,” he went on to say.