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Consumer credit and the rise of electric vehicles

Author

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  • Wang, Yue

Abstract

I study the credit channel of the electric-vehicle (EV) transition using more than 1.8 million German auto loans and leases. I show that EV financing contracts default significantly less often than comparable internal combustion engine vehicle (ICEV) contracts-particularly among lower-income borrowers. Following the 2020 expansion of German federal EV subsidies, lenders adjusted EV financing relative to comparable ICEV contracts. Independent banks tightened EV loan terms while lending to lower-income borrowers. Captive banks also tightened EV loans, mainly through non-price terms, while accommodating subsidy-period EV demand more readily through leasing.

Suggested Citation

  • Wang, Yue, 2026. "Consumer credit and the rise of electric vehicles," SAFE Working Paper Series 471, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewp:338128
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    References listed on IDEAS

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    1. William Adams & Liran Einav & Jonathan Levin, 2009. "Liquidity Constraints and Imperfect Information in Subprime Lending," American Economic Review, American Economic Association, vol. 99(1), pages 49-84, March.
    2. Alessandro Gavazza, 2011. "Leasing and Secondary Markets: Theory and Evidence from Commercial Aircraft," Journal of Political Economy, University of Chicago Press, vol. 119(2), pages 325-377.
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G50 - Financial Economics - - Household Finance - - - General

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