In Australia’s push to follow other developed nations’ transition to electric vehicles, one bank in the country said it will stop giving out loans for new gas or diesel vehicles beginning in 2025, including hybrids.
According to Sasha Courville, Bank Australia’s chief impact officer, the date was chosen “because the change to electric vehicles needs to happen quickly.”
"We think that the responsible thing for us to do next, is to ensure that our vehicle lending doesn’t lock our customers in to higher carbon emissions and increasingly expensive running costs in the years ahead," Courville said in a statement on Friday.
"Ultimately, our announcement today is the beginning of a conversation with our customers and a signal to the wider market that 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."
The announcement comes as the government in Australia said it was “significantly behind the pack when it comes to electric vehicles.”
To ensure that trend doesn’t continue, “national leadership is needed,” the government added. “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 idea of cutting off financial support for combustion engines is not new, according to CNBC.
In 2020, Denmark’s Merkur Cooperative Bank said it would halt financing for new diesel and gasoline cars.
All of this comes as major European economies are laying out plans to move away from road-based vehicles that use diesel and gasoline.
The U.K. wants to stop the sale of new diesel and gasoline cars and vans by 2030. It will require, from 2035, all new cars and vans to have zero-tailpipe emissions. The European Union — which the U.K. left on Jan. 31, 2020 — is pursuing similar targets. (CNBC)
The Australian bank said that loans would continue for used fossil fuel vehicles "until there is a viable and thriving market for electric vehicles."
Some on social media have questioned the motives behind the bank's decision.
Read between the lines.
— Keith Fitz-Gerald (@fitz_keith) August 22, 2022
Tesla borrowers are generally a higher tier – read less likely to default – than conventional car borrowers.
Begs the question.
Chances are good we know the answer but nobody is apparently asking the question because it’s a hot potato.
— Keith Fitz-Gerald (@fitz_keith) August 22, 2022
Ethically, morally, socially and politically.
US banks are going to be watching this closely. Expect similar moves here if there are no legal challenges.
— Keith Fitz-Gerald (@fitz_keith) August 22, 2022
And backlash from political hacks who will suddenly be "aware" of the issue a year from now.
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