Increased EV interest boosts Bank of America

Bank of America's vehicle lending portfolio is growing. Its first-quarter 2022 Vehicle Lending Average Loans & Leases of $50 billion was up 3 percent from the previous quarter and 7 percent from the same time last year.

Bank of America credited its growth to wider direct-to-client reach, stronger relationships with dealers and manufacturers and greater consumer interest in hybrid and electric vehicles. Bank of America also added more than 750 dealers to its authorized dealer network to make it easier for clients to do business with the lender.

The lender also now offers streamlined auto financing for electric and hybrid vehicles through its Core Auto channels. Bank of America's hybrid and EV products include loans to consumers looking to purchase new or used vehicles, buy out a current lease or refinance.

Fabien Thierry, 46, head of vehicle product lending at Bank of America, spoke with Staff Reporter John Huetter about how the lender is making strides. Here are edited excerpts.

Q: Did the elevated hybrid and EV interest you've witnessed predate the Ukraine war and the rise in gasoline prices?

A: While the current macro events have certainly elevated consumer interest in fuel- efficient vehicles, we have observed sustained growth in the segment for well over a year.

Our electric vehicle and hybrid vehicle loan originations in Q1 2022 doubled from a year ago, exceeding $787 million in Q1.

Notably, in 2019 and 2020, our hybrid and electric vehicle lending totaled more than $2.1 billion.

We are committed to assisting our clients in their own carbon reduction journey, in which access to electric vehicles plays a vital role.

We have increased our focus on assisting clients with their choice to go electric, which has helped support the origination growth in the segment.

Are you encountering any elevated interest in plug-in hybrids, or is it just traditional hybrids you find consumers want?

We are actually encountering more interest in electric vehicles than hybrids, based on recent origination trends.

You credited some of your growth to aligning with manufacturers "to provide financing options to their clients." Can you elaborate?

We are focused on establishing and elevating relationships with EV manufacturers as part of our commitment to achieving net-zero greenhouse gas emissions before 2050.

Late last year, Lucid Group selected us as their preferred lending partner. Through that new partnership, Lucid customers can apply online at Bank of America or work through Lucid Group's agents to finance their vehicle.

Additionally, we have a long-standing relationship with Volvo Car Financial Services and have collaborated with them to create Polestar Financial Services.

Regarding your expanded direct-to-client reach, do you foresee any tension with your dealer network over doing so?

We are committed to building education and awareness to support our clients on their choice to go electric, which is central to our purpose as a financial services company. As an example, we deployed two innovative efforts in 2021 to offer information and advice on EVs.

In August, we launched our new electric vehicle information web page, which provides clients with information on electric vehicle incentives, benefits and financing while highlighting how we're supporting their decision to make sustainability a priority.

In September, we invited over 11 million clients to learn about the latest EV models and technology at our Drive Electric: Virtual Vehicle Show Experience.

With this first-of-its-kind event, we delivered an innovative client experience, complete with advice and expertise from EV industry leaders. This event demonstrated our commitment to sustainability while helping our auto manufacturing partners showcase the newest electric vehicles.

This year, we continue to build upon our initial successes and remain committed to advancing client education and associate readiness.

What do you credit for the growth in your dealership network? How much larger would you like to see that network become?

Our dealership network growth is driven by a variety of factors, namely:

• As we step into new markets as an enterprise, dealerships have recognized the industry leading capabilities we deliver, which fuels new relationships.
• Due to our value proposition — whether that be our Digital Car Shopping platform, the breadth of our client base, the competitive pricing we deliver and relationships that are fostered — dealers continue to embrace the notion of engaging with Bank of America.

Instead of targeting a specific number to grow our dealership network, we are focused on building quality dealer relationships to serve our clients in their communities where their automotive needs can be realized with a trusted partner.