As a nation, we currently lag behind the global average for EV adoption, but a small Aussie bank wants to do something about it. By 2025, Bank Australia will stop giving new-car loans to customers buying a petrol or diesel-powered vehicle, including hybrids. From that point on, the bank will only offer new-car financing on EVs.
The bank says it’s part of a plan to hurry along the adoption of EVs in the country, according to CNBC, and to discourage buyers from sinking more money into internal combustion-powered machines. Our EV adoption rate currently sits at two per cent, compared to an average of nine per cent in the rest of the world.
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It’s a bold move considering that buyers can easily skip over Bank Australia and shop for a loan from another bank. Then again, it is the bank’s right to prioritise lending toward what it considers responsible practices.
In a statement given at an EV Summit on Friday, the bank’s chief impact officer Sasha Courville said the self-imposed ban on financing ICE-powered cars was a responsible step both for the environment and borrowers, adding that Bank Australia refuses to “lock […] customers into higher carbon emissions and increasingly expensive running costs,” as the Guardian reports.
Bank Australia claims to understand that not everyone can afford a new EV, nor will they be able to by 2025. And with the dearth of inexpensive EVs in markets around the world, it would be harsh to reject borrowers who couldn’t spring for a fancy new electric car.
So in order to help those who can’t afford a new EV, Bank Australia will still approve used-car loans on fossil-fuel-powered vehicles after 2025. The bank’s no-ICE policy will only apply to newly-purchased vehicles.
Courville said Bank Australia chose this policy to send a message. The bank makes a big deal of its use of renewable energy already, so this all tracks. And it’s a relatively small bank, with around 185,000 customer accounts. It’s not like this is a national financial institution telling you what to do with your money. Courville added, “if you’re considering buying a new car you should think seriously about an electric vehicle, both for its impact on the climate and for its lifetime cost savings.”
And she’s not wrong. I’ve pondered the idea of taking the plunge and going EV already. It seems like the more responsible decision, even if EVs still take an environmental toll.
Still, spending — and lending — money toward a clear environmental goal is one of the most effective ways that a consumer can send a message. That message, as far as Bank Australia is concerned, is “just buy the EV already!”
