Australian bank will end loans for new gas and diesel cars in shift to electric vehicles
Electric vehicles only make up about 2% of the market for cars in Australia
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An Australian bank announced this week that it will stop funding loans for new gas and diesel cars in 2025 to encourage the shift to electric vehicles.
"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," Bank Australia Chief Impact Officer Sasha 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."
FILE PHOTO: A Tesla Model X vehicle is taken for a test drive at a Tesla electric car dealership in Sydney, Australia. (REUTERS/Jason Reed / Reuters Photos)
Electric vehicle sales are increasing in Australia, but still make up a small fraction of all cars sold.
SURVEY SAYS THIS IS THE MAIN REASON PEOPLE DON'T BUY ELECTRIC CARS
The Electric Vehicle Council reported earlier this year that 20,665 electric vehicles were sold in 2021, representing about 2% of the market in the country for all cars.
Tesla accounted for more than half of all electric vehicle sales, as more than 12,000 Model 3s were bought by Australians last year.
FILE PHOTO: A Tesla Model X car (front) and Model S (2nd L) are photographed at a Tesla electric car dealership in Sydney, Australia, May 31, 2017. (REUTERS/Jason Reed/File Photo / Reuters Photos)
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Bank Australia, which also recently set a target date of 2035 to achieve net-zero emissions, said it will still offer loans for second hand gas cars "until there is a viable and thriving market for electric vehicles."
"While we will cease car loans for new fossil fuel cars from 2025, we are deeply aware that we need to support people not yet able to afford an electric vehicle while the market grows," Courville said.