Electric cars have been around for a hundred years or so, but until now, they’ve been at the fringes of the automotive world. This fall, the Nissan Leaf and Chevrolet Volt will go on sale, and Ford and Mitsubishi are planning to launch their electric cars sometime next year. Oh, and let’s not forget there are at least two companies (Zero and Brammo) selling street legal electric motorcycles right now.

The next few years are going to be interesting, to say the least. At the moment, electric cars cost quite a bit more than comparable gas-powered cars, mostly because of the cost of the batteries. There’s a $7,500 Federal tax credit that helps offset some of this cost, along with tax credits from a few states. Even then, thousands of people have put down deposits, and the Nissan Leaf is already sold out for 2011.

Of course, if you just look at the numbers, electric cars still don’t make a lot of sense. Operating costs are still not low enough to quickly offset the higher initial cost. And then there’s the whole debate about where the electricity comes from — in areas where coal is the primary fuel used to generate electricity, some calculations show that an electric car pollutes more than a gasoline powered car.

But let’s face it — cars are all about emotion, not numbers, or else we’d all be driving bright pink, foam-padded transport pods limited to 30mph under government computer control). Electric cars appeal to a whole new set of emotions. Instead of being the fastest, biggest, or loudest, they’re the most advanced, the smartest, the quietest.

So, more to the point for credit unions, how are people financing the electric future? That’s a little murky as yet, but things are definitely different. Nissan has a factory leasing program in place for the Leaf — $349 for the car, and $62/month for installing the home charging station, with $1,999 down (including Federal incentives). Nissan says maintenance costs are similar to or lower than a gasoline-powered car. The buyer’s electric bill will jump a bit, of course, but they won’t need to stop at a gas station unless they need a lottery ticket.

I see the following differences in financing electric vehicles (EVs):

• Higher initial cost and payments, somewhat offset by less spending on gas. Still, many popular gasoline-powered vehicles cost much more. The member’s plans for the EV may factor in to what payment makes sense. The more they drive, the more they’ll save.
• EVs mostly make sense as second cars in urban areas. No surprise there, so CUs in rural areas may not see many of these, even when they become more available. EVs may also show up in certain business uses in urban areas.
• Members may need help and reminders wading through IRS and state paperwork to claim tax credits and subsidies. If your state or locality offers EV incentives, you’ll need to understand how to claim them.
• Home improvements might be part of the cost — Nissan Leaf owners need to install a home charging station. Some EVs can recharge partially or more slowly from a standard 110V outlet, but many people lack 220V outlets in their garages or parking areas.
• Manufacturer leasing programs will be stiff competition, especially while EVs are new and different. The manufacturers may even subsidize these leases for a while in order to gain maximum PR value. CUs could launch lease lookalike programs, but the numbers will have to look right.
• The technology is changing fast, so early EV adopters will likely be eagerly looking for their next EV in two or three years. Leasing rather than borrowing will likely remain a popular way to drive a new EV, since these people won’t want to hang on to the same EV for five or ten years.
• Used EVs will start to pop up for sale in a few years — these will present the biggest opportunity for CUs. Perhaps CUs could come up with bundled “new battery” loans for hybrids and EVs in need of a refreshed power source. Used gasoline powered cars decline in value predictably with miles and years, but EV used values will depend greatly on the state and history of the battery pack. People buying a used EV may also need to budget for a charging station or electrical upgrades to their home.
• CUs can get many PR advantages from offering electric and hybrid vehicle loans, especially if your members tend to be in technical or academic occupations. If the CU owns a vehicle for courier service, consider the advertising and “green” value of an EV with a vinyl wrap.
• Many of these differences also apply to financing hybrid gas/electric vehicles, too.
• Don’t forget about electric scooters and motorcycles, especially if your CU is in a warm climate. With the incentives, these are a quite affordable and approachable way for people to get involved in EVs.