Volvo Cars became the first automaker to commit to producing a full line of electric or hybrid vehicles by 2019 last July, but this plan is not prompting a shift in the OEM’s financing strategy. “We see no difference in how we approach electrified cars from our finance company perspective,” a company spokesman told Auto Finance News.
Other automakers have made similar — but less comprehensive — commitments to EVs, such as Volkswagen making available five models by 2019; 12 variants from BMW by 2025; and the launch of Mercedes-Benz’s “EQ” electric brand. Additionally, Ford Motor Co., General Motors Co., and Toyota Motor Corp. all have plans to launch fully electric car lines in China. This week, both Ford and GM laid out plans for their future in mobility and electric vehicles.
“One thing we’re watching is the move toward technology in vehicles and the electrification of fleets,” Timothy McNally, associate director of structured finance asset-backed securities for Fitch Ratings Inc., told AFN. “When you look at all the major manufacturers, they have all given three- to five-year goals of fully electric fleets,” he said.
There is not much discussion yet, in terms of the financing surrounding fully electric fleets, because there is not a lot of data on the residual value of the vehicles. The concern is that the technology is advancing so rapidly that early electric vehicles could depreciate faster than expected given the limited history to predict residual value, McNally added.
