Bank of America is tapping into surging demand for clean and efficient consumer transportation with a new financing option that ties the purchase of at-home charging stations to electric vehicle sales.
The Charlotte, North Carolina, bank said Wednesday that it is seeking to ease the process of switching from gasoline to electric-powered vehicles by making the new financing program available to a network of 10,000 car dealerships across the country.
The average price of a new electric car is around $66,000, according to the automotive research firm Kelley Blue Book. Buyers of new and used electric vehicles can add the cost of a charging station for a "fairly minor" increase in loan payments, said Fabien Thierry, BofA's head of consumer vehicle products.
"Clients will be able to walk away with a charging station already embedded in the financing of their vehicle," Thierry said in an interview. The program, he added, is built around "convenience" and designed to "help our clients go electric."
At-home charging stations range in price from $200 to $2,000, according to BofA.
Electric-vehicle purchases have increased significantly in recent years, driven by federal subsidies, rising fuel prices and consumer demand for clean and efficient transportation options.
A June 2022 study by the Edison Electric Institute estimated that 26.4 million electric vehicles will be driving on U.S. roads by 2030, up from 18.7 million in 2018.
After the enactment of last year's Inflation Reduction Act, government tax incentives are poised to provide more momentum. The law allocates tax incentives of up to $7,500 for new electric-vehicle sales and $4,000 for used EV purchases.
Until recently, credit unions have been the primary source of specialized financing options for electric vehicles, according to Marc Geller, a spokesperson for the Electric Vehicle Association.
The financing deals typically offer consumers the option to purchase an electric vehicle at slightly lower interest rates than for new gas-powered cars, he said.
BofA's financing program may not be such a "great sweetener" for every potential customer because the cost of an at-home charging station is "not a lot of money" compared with the cost of an electric vehicle, Geller said.
"I try to make electric cars as cost-beneficial as possible. That may mean holding off on the decision to buy a charging station if you only drive 30 or 40 miles a day," Geller said.
"I advise everyone who gets an electric car and has a place to plug it in at home to get the car, plug it into an outlet and see if you get enough charge overnight for what you need," he said.
BofA has previously launched electric-vehicle initiatives as part of its goal to deploy $1.5 trillion in sustainable finance by 2030 and reach net-zero greenhouse gas emissions by 2050.
Last May, the bank partnered with Electrify America to more than double the number of BofA locations equipped with electric-vehicle charging stations by the end of this year. In June, the bank began working with electric-vehicle manufacturer Lucid Motors to provide digital consumer financing options.
BofA also began a program last year that provides employees up to $4,000 to purchase an electric vehicle and up to $2,000 for leases.
Other banks are also jumping at opportunities in the growing electric-vehicle market.
Earlier this week, the electric car manufacturer VinFast said that U.S. Bank, a unit of Minneapolis-based U.S. Bancorp, will be the preferred provider of retail financing and leasing for its vehicles in the United States.
