Cars and buses in Sydney, Australia on Monday 25th May 2020. The country’s authorities want to create a national strategy for electric vehicles.
Brendan Dorn | Bloomberg | Getty Images
An Australian bank plans to halt lending for new diesel and petrol cars as the country seeks to encourage EV use and catch up with other developed countries.
In a statement on Friday, Bank Australia said it would eliminate loans for new fossil fuel vehicles from 2025. Their chief effects officer, Sasha Courville, said the date was chosen “because the transition to electric vehicles needs to happen quickly.”
The bank, Courville said, 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 lending for new internal combustion engine vehicles – including hybrids – from 2025, Bank Australia will continue to lend for used ones.
“We will continue to offer loans for older fossil fuel vehicles until there is a viable and thriving market for electric vehicles,” it said.
On that front, the Australian government on Friday provided information on plans to define a national electric vehicle strategy for the country and released a discussion paper on the subject for consultation.
In an announcement, the government said Australia is lagging far behind the pack when it comes to electric vehicles.
It said that the country’s acceptance of new low-emission vehicles, at just 2%, was “nearly five times lower than the global average – a requirement for national leadership to ensure we are not left behind”.
“In this context, we believe that now is the time to have a systematic and sensible discussion on whether vehicle fuel efficiency standards can help to improve the supply of electric vehicles in the Australian market to reduce the risk of an inefficient one reduce the car lifestyle.” environmental impact and reduce emissions from the transport sector.”
Client-owned Bank Australia traces its roots back to 1957. According to its 2021 statutory financial report, total assets were AUD 8.5 billion (US$5.9 billion) and profit after tax was AUD 40.7 million.
It’s not unique in its strategy over vehicles that use fossil fuels. In 2020, the Danish Merkur cooperative bank announced that it would stop financing new diesel and petrol cars.
All of this comes at a time when major European economies are planning to move away from diesel and petrol road vehicles.
Britain wants to stop selling new diesel and petrol cars and vans by 2030. To achieve this, all new passenger cars and vans would have to be emission-free by 2035. The European Union – from which Great Britain left on January 31, 2020 – is pursuing similar goals.
Electric vehicle sales will reach 6.6 million in 2021, according to the International Energy Agency. In the first quarter of 2022, electric vehicle sales reached 2 million, an increase of 75% compared to the first three months of 2021.