Bank Australia to cut lending for new diesel and petrol cars

Woman holding smartphone waiting for her electric vehicles to charge (OVO Energy)
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Customer-owned Bank Australia plans to stop giving loans for new diesel and petrol cars as Australia tries to encourage the use of electric vehicles (EVs), CNBC reports.

In a statement, Bank Australia said it would scrap loans for new fossil fuel vehicles from 2025.

Chief impact officer Sasha Courville said Bank Australia believed the transition to electric vehicles could happen “with the right supporting policies in place to bring a greater range of more affordable electric vehicles to Australia”.

Related article: ACT launches interest-free loans for EVs

While it will no longer provide loans for new combustion engine vehicles or hybrids from 2025, Bank Australia will continue to provide finance for used ones.

“We’ll continue to offer loans for second-hand fossil fuel vehicles until there is a viable and thriving market for electric vehicles,” it said.

The federal government also has a National Electric Vehicle Strategy in the works, with a discussion paper on the matter due to be released for consultation.

The government said Australia was “significantly behind the pack when it comes to electric vehicles”.

Sitting at just 2 per cent, the country’s uptake of new low-emission vehicles is nearly five times lower than the global average.

“In this context, we believe that now is the time to have an orderly and sensible discussion about whether vehicle fuel efficiency standards could help improve the supply of electric vehicles into the Australian market, to address the cost-of-living impacts of inefficient cars, and to reduce emissions from the transport sector,” the government said in a statement.

Related article: Risk of electrocution from EVs reduced with new tech

Major European economies are also hatching plans to move away from fossil fuel vehicles.

The UK wants to stop the sale of new diesel and gasoline cars and vans by 2030. From 2035, it will require all new cars and vans to have zero-tailpipe emissions. The European Union is pursuing similar targets.

According to the International Energy Agency, electric vehicle sales hit 6.6 million in 2021. In the first quarter of 2022, EV sales came to 2 million, a 75 per cent increase compared to the first three months of 2021.

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