This Folsom company wants to cut the loan costs of your electric vehicles. Here’s how
Kevin Favro’s startup EV Life aims to close the affordability gap between buying an electric vehicle and a gas-powered one by closing the gap of time.
Favro, a Folsom software engineer, said electric vehicles can cost on average $10,000 to $15,000 more than their gas-powered counterparts, discouraging potential purchasers. He said even though tax credits, rebates and other incentives for buying a zero emissions vehicle can close the gap, consumers must wait for the rebates.
His company eliminates the wait.
“The value of our loan is we’re giving you the power of those post-purchase incentives today,” Favro said.
EV Life builds the various rebates into the vehicle loan issued by his company.
Favro said consumers may want to make positive environmental choices, and save on gasoline, but are also looking for the lowest loan payments possible.
He said EV Life reduces the payments on an electric vehicle loan by as much as $200 a month. Vehicle owners have 18-months to pay back the incentives built into the loan, Favro said, allowing a long time period to obtain and repay the incentives.
According to research done by his company, Favro said consumers care more about how much the electric vehicles cost and not how far they can go without a charge.
“Affordability is the number one barrier preventing people from going electric, not range anxiety,” Favro said.
Sorting through all the offers
Favro said originally the startup was aimed at calculating what type of electric range owners could get in different vehicles, to combat that “range anxiety.”
Favro said he and his co-founder Peter Glenn could not figure out a way to “monetize” the proposition. He said a chance visit to a KIA dealership looking to buy an electric vehicle showed him that the process of receiving rebates was complicated and could take months to receive the payments. He described the maze of rebates and how long it takes to receive them.
“It can take hours figuring them out,” he said.
He said EV Life grew from that idea that there was a better way.
Targeting incentives and rebates
Federal and state of California electric car incentives can total to $15,000 combined, depending on income level and family size. Residents in the Sacramento Municipal Utility District can also receive $1,000 in charging incentives.
Consumers enter the car model they want to buy and income parameters on EV Life’s website, which gives estimated loan payments and interest rates.
EV Life loans range between 5.7% and 8.9%. Consumers can then take the auto loan approval to a dealer of their choice.
In addition to its loan program, Favro said EV Life has also sold his propriety technology to Toyota and Nissan, enabling customers of those car companies to get specifics on what rebates they are eligible for.
EV Life is small – it only has four employees including co-founder Favro. The company was founded in April 2019 in Folsom after winning a Folsom area startup competition.
But it only started giving out its first loans in June. Favro said his company has processed hundreds of loan applications but would not say how many loans have been issued.
State money and investors
A $150,000 grant from California Energy officials gave EV Life its initial funding. Favro said nearly another $1 million in financing from investors was also raised.
EV Life buys commercial loans from financial institutions that are then repackaged under its name. A $5 million loan guarantee from the state-run California Infrastructure and Economic Development Bank guarantees those financial institutions that they will be repaid for up to 80% of those loans, making the banks willing to give a new startup capital for the consumer loans, Favro said.
In August 2022, California passed the then-first in the nation mandate on electric cars. It requires all new cars and light trucks sold in the state to be electric by 2035. Twelve other states have since passed similar laws.
Electric vehicles made up 21.1% of California’s new car sales in the first quarter of 2023 ending March 31, but a long road lies ahead to achieve California’s ambitious zero-emission goal, said Electric for All, a public private partnership aimed at promoting electric vehicle ownership.
Folsom connection
Favro works out of a home office in Folsom. Glenn, who is in charge of marketing, lives in Tiburon, CA.
Both met in college at Loyola Marymount University in Los Angeles several decades ago. Favro’s goal is to open a physical office in the Sacramento region as the company gets bigger
“I am committed to this area,” he said.
