When it comes to EVs, Chase Auto CEO Peter Muriungiopens in same window is as practical as he is progressive. “We all want the climate to be better for our children,” he says. “But Chase also aims to be a bank for all. And for most people, EVs still aren't affordable or viable.”
What does Muriungi think it will take for EVs to become more accessible to more consumers? And how is Chase contributing to that effort as a household name and a major lender that has relationships with 75% of U.S. franchised auto dealers?
In a recent conversation, Muriungi shared his no-nonsense views on these and other key questions confronting consumers in today’s rapidly evolving auto market.
At a high level, what is your perspective on EVs?
Muriungi: Driving an EV instead of a traditional gas-powered car is one way for individuals to benefit the environment. If you can afford an EV, consider getting one.
However, there aren’t many EVs under $50,000 yet. And I know there are a few surprises that many EV owners face. As an example, an EV’s actual range is often less than what is stated, depending on factors like how you drive and the weather – like if you live in Texas like I do, where it’s hotter, you could get less range out of your car. They also say you can charge in 23 minutes, but there are very few working fast chargers in Texas that do that.
So, my perspective is that we need to move toward EV adoption, while also acknowledging realities around cost, range, and infrastructure.
What do you think it will take for EV adoption to really take off?
Muriungi: There’s been exceptional growth in the past few years, but the number of EVs sold still represents a very low percentage of market share. According to the International Energy Agency, electric car sales in the United States increased 55% in 2022, and sales are expected to continue strongly through the end of 2023 – when the agency expects to see a 35% year-over-year increase in new purchases. Same page link to footnote reference 1 And yet, EVs comprise just over 7% of the U.S. market. Same page link to footnote reference 2
The average price of a new car right now is around $48,800 Same page link to footnote reference 3, so I think there could be a tipping point in EV adoption when more manufacturers are able to offer EVs for that price or less – right now the average EV is going for more like $53,400, so in some ways it feels like we’re not far off. But my view is that EVs will also need to have a range of 450 to 500 miles. Right now EVs are averaging more like 290 miles. Same page link to footnote reference 4 And there's the issue of whether you own your home. If you live in an apartment and can’t install a home charging station, will the infrastructure work for you?
Given these factors, I actually see hybrids as an excellent option right now to help with the transition to all-electric.
Could you say more about where you see hybrids fitting in?
Muriungi: I think hybrids can tee up the transition to EVs. Hybrids have solved the cost problem, typically costing just $2,000 to $3,000 more than comparable gas cars, which is often offset by fuel savings. They’ve also solved the range problem, because you have the best of both worlds — they can run on gas as well as electric power. Their market share is growing rapidly, and they represent a good way to do your part for the environment if an EV isn’t possible for you right now.
What do you see as Chase’s role in EV and hybrid adoption?
Muriungi: We are first and foremost a finance company. We provide loans for cars. With that in mind, we’re interested in winning EV customers the same way we do with any kind of car loan: through transparency, convenience, and value.
We want to offer the right financial products for EVs as they are now and as the industry continues to evolve. We have offered financing for installing home charging equipment for almost a decade; it gets bundled with your car loan. In the years to come, there could be over-the-air software updates or interchangeable batteries that consumers want to finance at some point, and we would like to be ready to support them in that.
We also offer fact-based education on the EV market on www.Chase.com/EVopens in same window. This site offers lots of information for people who want to learn more about EVs and hybrids, and we are always refreshing those pages and adding current research and insights.
Chase also has a pilot program with EVgo where we offer chargers at several of our branches, making it easier for Chase customers to charge their cars while speaking with their banker.
And there is still more we can all do; adoption is the goal, but we need to be practical about how we get there — and honest about how far the industry still needs to go.
To learn more about EVs, visit www.Chase.com/EVopens in same window.