Plenti has expanded into the lucrative electric vehicle financing market, in a move that could substantially boost its loan book.
Fintech lender Plenti Group (ASX:PLT) has strategically moved into the fast-growing electric vehicle (EV) financing market.
Plenti’s moves follow the Australian Government’s policy announcement this week that it has committed $250m to partnering with private enterprise to accelerate the rollout of 50,000 charging and hydrogen refuelling stations.
The government expects the additional charging and hydrogen refuelling stations would result in at least 30% of new car and light commercial truck sales being electric or low-emissions hybrids by 2030.
Plenti is launching a suite of EV finance products and tools, featuring highly attractive pricing and unique add-on features to help customers transition to EV ownership.
Plenti cuts EV lending rates
Plenti will offer a 50-basis point discount for EV loans on its already highly competitive combustion engine lending rates with the ability to borrow additional amounts to fund EV-related infrastructure such as chargers, downloadable vehicle upgrades and other accessories.
The company is also integrating discounted EV-specific insurance to its offering, featuring battery and charger damage cover.
Plenti is developing a comprehensive online portal providing information about EVs, including how to apply for government subsidies and clarifying common misconceptions in relation to ownership cost, range capacity and charging access.
Plenti CEO Daniel Foggo said the EV market was starting to take off in Australia as more people recognised their benefits. He said the company was excited to introduce its EV finance offering to broker partners and the 600,000 customers in Plenti’s ecosystem.
“Plenti’s faster, fairer EV finance and tools will help more Australians transition to an EV, making it easier than ever to research, find and purchase their first EV,” he said.
Foggo said offshore experience had shown that the introduction of EVs moves the vehicle purchase experience online and this was now starting to happen in Australia.
“Thanks to our experience in both the auto and household renewable energy finance markets and our proprietary technology platform, which can seamlessly integrate with digital car buying experiences, Plenti is uniquely positioned to take advantage of this significant shift,” he said.
He said the adoption of EVs was critical to Australia achieving its carbon emission reduction targets.
“Not only can EVs reduce transport emissions, but their ability to integrate with the home and energy grid mean they are poised to play a significant role in helping households reduce power bills and support grid stability.”
Plenti establishes new warehouse funding to support EV move
Plenti is well-advanced in establishing a new automotive warehouse with a cost-effective EV-specific tranche supported by one of the big Australian banks, which the company believes to be an Australian first.
“In time, this new warehouse facility will provide a pathway for Plenti to issue an EV-only green ABS (asset backed security), delivering an attractive new investment opportunity for fixed-income investors seeking environmentally responsible assets,” Foggo said.
He said funding for EV loans will come from Plenti’s existing automotive warehouse until the dedicated EV funding is in place.
“With sales of electric vehicles doubling in the year to date since 2020 and forecast to
grow strongly over the next decade, our entry into the EV market will help propel our short and longer-term growth.”
Plenti forecasts milestone $1 billion loan book for Christmas
In a year of rapid growth for Plenti, the company has brought forward its $1 billion loan book target to this quarter, instead of March 2022.
The company achieved another record quarter for the three months ending September (Q2 FY2022).
Driving Plenti’s growth has been record loan originations across its three lending verticals – automotive, renewable energy and personal.
Plenti started lending loans as a private company in 2014 before listing on the ASX in September 2020.
It is focused on lending to prime credit customers and over recent years has further improved its credit quality through its shift to secured automotive loans and household renewable finance.
An increased use of warehouse funding has reduced costs on its new loan originations.
The company has seen its loan book grow exponentially from $385m in June 2020, to more than $915m at September 30.
This article was developed in collaboration with Plenti, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.