More small businesses open to buying electric cars: CBA
By Sourced Externally
April 25, 2022
Electric vehicles are powering more Australian small businesses as they adopt greener policies and attempt to dodge rising petrol prices, according to the latest data from the Commonwealth Bank.
EVs have recorded the biggest investment uplift, rising by 156 per cent, according to the CBA asset financing figures. It comes after separate research from the bank showed businesses in sectors most reliant on transport, distribution and construction had warmed to electric vehicles.
A survey of more than 900 businesses revealed 32 per cent of those in distribution and 37 per cent in construction are considering adding electric vehicles to their fleets.
CBA’s executive general manager for business lending, Grant Cairns, said while environmental concerns and fuel savings were part of the decision-making process, businesses were also investing in new technology to attract staff in a tight market.
“As organisations welcome employees back into offices, they are investing in new technology to attract and retain staff, and many are demanding sustainable business investments. We’ve seen an uptake in hybrid and electric vehicles, as well as investments across other assets, including IT equipment,” Mr Cairns said.
“More small businesses are also seeing the benefits – including the financial benefit – of replacing old equipment with energy-efficient alternatives.”
It produced 305,400 cars during the period – a 69 per cent increase – and could have made more, with a tight supply market limiting manufacturing.
In total, Mr Cairns said the CBA research showed about 60 per cent of businesses expected electric cars to become mainstream by 2030. Already some carmakers, such as Volvo, have set that date for eliminating combustion engines from their line-up.
“There’s a real acceptance now … people are accepting that it’s coming online and can see the advantages,” Mr Cairns said.
“Having said that, I think there are some concerns, which came through in our research, around battery range and cost.
“But there has been some incentives in place. The NSW government had some incentives to help drive adoption and we’re seeing more and more manufacturers that are offering electric vehicles in the Australian market now.
“There are about 38 electric vehicles (in the market) and that is expected to be up to 52 by the end of the year.”
In 2020 ARENA funded a report that found that importing used electric cars represented a “significant business opportunity” and would accelerate the adoption of electric vehicles in Australia, lowering prices and giving consumers more choice, despite the government rejecting such a move.
In total, CBA financing for equipment and machinery has jumped 17 per cent this financial year, compared with the same period in 2021. The financing data also shows 67 per cent of businesses have budgeted for new business equipment in the next 12 months, with 55 per cent of those businesses specifically planning to invest in IT and office technology.
“Government incentives have played a significant role in lifting business investment over the past few years … we’ve seen continued growth in asset finance in the SME sector, with the instant asset write-off scheme providing a good reason for customers to upgrade,” Mr Cairns said.