The Future of EV Financing: Key Trends for 2026 and Beyond

EV financing is young and moving fast. The product infrastructure, lender knowledge, and data available today are materially better than they were two years ago. The next two to three years will accelerate that further. Here's what I'm seeing from where I sit.

The used market is finally deep enough

The most consequential near-term shift isn't technology or policy, it's supply. A large wave of off-lease EVs is hitting the used market in 2026, with volume expected to peak near 800,000 vehicles annually by 2028. Tesla Model 3 and Model Y dominate that supply. EVs were roughly 7.7% of off-lease vehicles across all fuel types in Q1 2026; that share is projected to approach 15% by year-end.

For buyers, this means the used EV market is deeper, better-priced, and more predictable than it has ever been. For lenders, five-plus years of loan performance data is finally improving underwriting quality and pushing rates lower for well-qualified borrowers. The collateral story is far better understood than it was even 18 months ago, and it keeps improving.

Better Residual Data Means Better Underwriting

Early EV lending was mostly directional. Lenders had to estimate depreciation and collateral risk with limited data and a lot of guesswork. We ended up relying more on consumer creditworthiness and ability to repay than understanding the collateral. That's changed fast now that many models have three or more years of real-world performance behind them.

Third-party battery health tools, and manufacturers' own data, are giving consumers and lenders clearer visibility into portfolio longevity - at Tenet we've been pleasantly surprised at how range and battery health has held up. As individual battery health reports proliferate, expect more differentiated vehicle valuations and pricing, based on verified battery condition over vehicle age and mileage, we'll start seeing wider acceptance of older model years and higher mileage electric vehicles as long as the battery health checks out. Simply, battery health is becoming the new odometer. Lenders who use it can price more favorably, those who ignore it are mis-pricing risk.

Hardware Generations Will Drive Loan Valuations

Tesla's AI4.5 is in current production vehicles. AI5 taped out in April 2026 and is due in vehicle production mid-2027. The divergence between HW3, AI4, AI4.5, and eventually AI5 vehicles creates measurable residual value differences that lenders will increasingly price into collateral assessment. Tesla is already trying to figure out how to retrofit hundreds of thousands of vehicles running on HW3, that will never be able to drive autonomously with that hardware.

Buyers who finance AI4/AI4.5 vehicles today are financing assets that retain software relevance longer, which translates to better collateral quality and, over time, better financing terms relative to older hardware. The risk is how soon that technology in turn is leapfrogged. On the downside, even vehicles with HW3 are great daily drivers and family cars with lower fuel and maintenance costs than their gasoline equivalents.

Credit Union EV Programs Are Expanding

Banks have been the most aggressive EV lenders in recent years through captive or first party financing programs with the lenders. Credit Unions have been more risk averse, but when they do lend often have far more competitve rates than you'd find at your bank or the dealer. That said, the share of new EV purchases financed through credit unions has grown every year since 2021. Many now offer explicit EV programs with 0.25-0.50% rate discounts vs. their standard auto loan rate.

Tenet's model, working directly with credit union partners to originate EV loans, is part of this trend. As more credit unions build EV-specific expertise, the rate gap between EV-specialist lending and traditional bank financing will further benefit the EV buyer.

What Doesn't Change

Regardless of technology or market shifts, the fundamentals of EV financing remain constant: credit score and ability to repay will continue to be the primary driver of approvals and rate; LTV discipline will remain important during periods of price volatility; researching financing options before purchase will continue to be the highest-value action available to buyers; and GAP coverage will remain most valuable in the first two years of a new-car loan while service contracts that cover the battery will be important for older or higher mileage vehicles.

One Last Thing

The EV financing market in 2026 is materially better for buyers than it was in 2022. Better data, more lenders, deeper used market, more competitive rates. The trend continues in the buyer's direction.

Check your EV financing rate with Tenet, two minutes, no credit impact.

Rates as of April 2026, subject to change. APR range 5.25%-18.99%; regional rates as low as 4.40% through select credit union partners. Minimum loan balance $10,000. Tenet Energy Inc., NMLS #2262929.