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Australian bank cancels loans for new diesel and petrol cars

Australian bank cancels loans for new diesel and petrol cars

Cars and buses in Sydney, Australia, on Monday, May 25, 2020. Authorities in the country want to set up a national electric vehicle strategy.

Brendon Thorne | Bloomberg | Getty Images

An Australian bank plans to stop lending for new diesel and petrol cars as the country tries to encourage the use of electric vehicles and catch up with other developed countries.

In a statement Friday, Bank Australia said it would cut loans for new fossil fuel vehicles from 2025. Sasha Courville, the chief impact officer, said that date was chosen “because the move to electric vehicles needs to happen quickly”.

The bank, Courville added, believed this could happen “with the right supportive policies to bring a wider range of more affordable electric vehicles to Australia.”

While there will be no more loans for new combustion engine vehicles – including hybrids – from 2025, Bank Australia will continue to lend them to used vehicles.

We will continue to provide loans for used fossil fuel vehicles until there is a viable and thriving electric vehicle market.

On that front, the Australian government also provided information on Friday about plans to establish a national electric vehicle strategy for the country, with a discussion paper on the matter to be released for consultation.

Read more about electric vehicles from CNBC Pro

In an announcement, the government said Australia is “significantly behind the pack when it comes to electric vehicles”.

It added that, at just 2%, the country’s uptake of new low-emission vehicles was “almost five times lower than the global average — national leadership is needed to ensure we are not left behind.”

“In this context, we believe it is now time to have an orderly and sensible discussion on whether vehicle fuel efficiency standards can help improve the supply of electric vehicles in the Australian market, to reduce the impact of inefficient cars on the cost of living.” , and to reduce emissions from the transport sector.”

Bank Australia, owned by customers, dates back to 1957. According to the 2021 Statutory Financial Report, total assets had grown to 8.5 billion Australian dollars ($5.9 billion), with an after-tax profit of 40.7 million Australian dollars. dollars.

It is not unique in its strategy for vehicles powered by fossil fuels. In 2020, the Danish Merkur Cooperative Bank said it would stop financing new diesel and petrol cars.

All of this comes at a time when major European economies are drawing up plans to move away from road vehicles that use diesel and petrol.

The UK wants to stop selling new diesel and petrol cars and vans by 2030. It will require all new cars and vans to have zero tailpipe emissions from 2035. The European Union – which left the UK on January 31, 2020 – is pursuing similar goals.

According to the International Energy Agency, sales of electric vehicles in 2021 were 6.6 million. In the first quarter of 2022, sales of electric vehicles reached 2 million, an increase of 75% compared to the first three months of 2021.