EVs zoomed ahead with a 8.2% slice of auto financing pie in second quarter

“Tesla is still the dominate player,” Merchant said, but added that new offerings from other manufacturers, including Ford Mustang Mach-E, have attracted consumers.

“What’s exciting about EV is there are more models available, and they are capturing more market share.”

Vehicles with internal combustion engines (ICE) still were the lion’s share of new auto sales in the second quarter, but one in five sales were EV or hybrid models (see chart).

To be sure, federal tax credits and recent pledges by manufacturers to create more fast EV charging stations have helped boost the allure of elective vehicles.

Read: See which electric vehicles get a tax break on new list

On the flip side, many households have been contending with higher interest rates as the Federal Reserve fights to bring down inflation and with the aftershocks of record pandemic prices for new and used vehicles, both of which have pinched affordability. The combination dented demand for new auto originations in the second quarter, which fell to 6.1 million, down 9.4% from a year ago, according to TransUnion data.

Read: Used cars for less than $20,000 have ‘nearly vanished,’ study says

Still, overall consumer credit rose $23 billion in April, up from a revised $22.8 billion gain in the prior month, according to the Federal Reserve.

Tesla Inc.
TSLA,
+1.30%
in late July reported second-quarter earnings and sales that topped Wall Street’s expectations, while sticking to its goal this year of making about 1.8 million vehicles.

See: Tesla reports 47% rise in sales for its second quarter, but profitability shrinks

Ford Motor
F,
-4.48%
in late July also reported results, saying quarterly profit was roughly three times higher than last year’s and a 12% increase in its revenue, despite a delay in its EV production goals.

U.S. stocks were higher Thursday after a reading of the July consumer-price index showed a slight uptick in the annual pace of inflation to 3.2% from to 3% in the prior month. The Dow Jones Industrial Average
DJIA
was up 0.5%, the S&P 500 index
SPX
was 0.4% higher and the Nasdaq Composite Index
COMP
was also up 0.%, according to FactSet.