Zusammenfassung:
I study the credit channel of the electric-vehicle (EV) transition using more than 1.8 million German auto loans and leases. I show that EV financing contracts default significantly less often than comparable internal combustion engine vehicle (ICEV) contracts-particularly among lower-income borrowers. Following the 2020 expansion of German federal EV subsidies, lenders adjusted EV financing relative to comparable ICEV contracts. Independent banks tightened EV loan terms while lending to lower-income borrowers. Captive banks also tightened EV loans, mainly through non-price terms, while accommodating subsidy-period EV demand more readily through leasing.