As Tennessee Becomes Major Hub For EVs, Electric Co-op Stays Ahead By Offering Eco-Friendly Programs For Members & Employees
When Ford recently unveiled plans to build “Blue Oval City,” a major automotive assembly plant in western Tennessee, electric cooperatives across the country paid particularly close attention. The $5.6 billion mega-complex is expected to create nearly 6,000 permanent jobs, but here’s the real headline – the new plant will only make electric trucks.
The announcement of Ford’s mega-campus, to be located northeast of Memphis with opening slated for 2025, is the latest sign of an electric vehicle revolution that, in less than a decade, has transformed Tennessee into the top EV producer in the entire Southeast region. Only eight years ago, the first EV produced in the state rolled off the assembly line at Nissan’s plant in Smyrna, where the all-electric LEAF compact is made. Since then, Volkswagen in Chattanooga and General Motors in Spring Hill have debuted their own locally made electric models.
MTE came to us for guidance on how to get their EV program off the ground, specifically which models to lease, and how to maximize terms for that lease.
When it comes to the electrification of the transportation sector, the Volunteer State is on quite a roll. That’s a big reason why electric co-ops from near and far are keeping such a watchful eye on Tennessee and EVs. According to Brad Gibson, chief business officer for Middle Tennessee Electric, the co-ops most closely attuned to EV hotspots and market trends are the ones best positioned to serve their own members.
“The lessons we’re learning from Tennessee’s EV revolution provide excellent insights for electric co-ops nationwide,” says Brad, whose not-for-profit co-op, the second largest in the U.S., serves more than 300,000 members primarily located in a four-county area just south and east of Nashville. “At MTE, we have our own fleets, everything from small vehicles to big bucket trucks, and we anticipate a transition to more EVs in the coming years. We’re fortunate to operate in a place that’s experiencing tremendous EV growth. Over the years, we’ve come to understand that our future success largely depends upon how well we listen to our members, and then provide what they’re asking for, from electric technologies such as EV and solar, to different rate options, to broadband services.”
MTE currently has about 2,500 members who drive EVs. Brad expects that number to jump in the next few years as automakers produce electric cars and pickup trucks. “We know EV drivers are the early adopters,” he explains. “As a next step, we’re thinking about the role electric co-ops like ours play in educating the local EV market so we can continue to be a valuable information resource for electric vehicle adoption as well as other environmentally friendly programs and services.”
On the business side, for example, MTE is working closely with builders, contractors, and real estate developers to help them get homes EV ready. In many instances, that can mean installing the appropriate outlet in a garage to accommodate Level 2 EV chargers, which charge much faster than a normal wall outlet, during the early stages of home construction.
For consumers, MTE has partnered with Touchstone Energy Cooperatives to roll out an EV car club. This innovative program gives co-op members the chance to meet with fellow EV enthusiasts and drivers, share information and experiences, participate in club events, and receive perks designed by the co-ops.
A Financing Solution for EVs
Members aren’t the only ones getting involved in the EV space; MTE employees are embracing the new vehicles as well. MTE reserves two EVs in its fleet – a Nissan LEAF and a Chevy Bolt – for employees to borrow as part of a free rental program. “Our team members are loving these EVs, for taking the kids to soccer games, for running errands, and so on,” Brad says. “We figured there’s no better way for MTE to get educated on EVs than to have our own employees take them out for a spin and gain confidence in the performance and range they can expect from these new vehicles.”
To lease the two EVs for its employee program, MTE turned to CoBank Farm Credit Leasing (FCL), its longtime financing partner, and the deep discounts it can offer. CoBank FCL takes advantage of federal tax credits to arrange for leases with a fixed rate, low payment, and without mileage restrictions. At the end of the lease, co-ops have the option to purchase the vehicle or allow one of their employees to buy it out for the stated residual, sell it to another party or trade it in, or turn it into FCL who will remarket and sell the vehicle, sharing 100% of the upside with the co-op.
“MTE came to us for guidance on how to get their EV program off the ground, specifically which models to lease, and how to maximize terms for that lease,” said Luke Gains, CoBank vice president – electric distribution. “Working with us, electric co-ops find they can lease EVs at an interest rate that’s going to be close to zero or even negative in some cases. In hot markets like Nashville, where consumers are eager to adopt new technology like EVs, providing co-ops with cost-effective financing methods and access to cutting-edge vehicle technology to educate their consumer-owners makes great sense.”
CoBank Farm Credit Leasing offers a range of flexible equipment financing options for vehicles, equipment and facilities that can deliver significant benefits to rural and utility businesses.
Contact your CoBank relationship manager today to learn how we can help in the financing of a wide variety of the assets needed to run your business effectively and profitably.