(23 August 2022 – Australia) An Australian bank is planning to cease writing loans for new gasoline and diesel powers cars as the country seeks to accelerate electric vehicle (EV) usage in line with other Organisation for Economic Co-operation & Development (OECD) countries.
Bank Australia declared it is ending car loans for new fossil fuel vehicles from 2025. While there will be no more loans for new combustion engine vehicles including hybrids from 2025, Bank Australia will continue to offer loans for second-hand fossil fuel vehicles until there is a viable and thriving market for EVs however. The Australian government concedes the country is “significantly behind the pack when it comes to electric vehicles” following its release of its plans to set up a National Electric Vehicle Strategy, with a discussion paper on the matter due to be released for consultation.
Australia’s sluggish two percent uptake of new low-emission vehicles was almost five times lower than the global average, required national leadership to ensure the country doesn’t continue to be left behind.
Bank Australia is not alone in its strategy toward phasing out vehicles powered using fossil fuels. Arval in the United Kingdom projects company car fleets and vans run on diesel or petrol to shrink significantly by 2025 while Denmark’s Merkur Cooperative Bank has halted financing for new diesel and gasoline cars since 2020.
“That date had been picked because the change to electric vehicles needs to happen quickly. This could happen with the right supporting policies in place to bring a greater range of more affordable electric vehicles to Australia” commented Bank of Australia Chief Impact Officer, Sasha Courville.