Two of Australia’s largest banks have recorded a three-fold annual increase in business loans for electric vehicles as companies increasingly make the switch to a greener fleet.

National Australia Bank’s executive general manager of specialised banking, Julie Rynski, said cheaper loans, a greater range of EVs and government incentives was prompting the growth.

“Everyone’s trying to do their bit to make investments to reduce their carbon footprint,” Rynski said.

“We’re expecting to see a further increase as the technology advances. For example, [electric] cars can now go further [without charging], the range becomes broader, the infrastructure becomes stronger – even at small shopping strips, there are EV plugging stations.”

NAB did not provide the value of the loans or the raw figures, but said its finance for EVs grew 224 per cent between October 2022 and September 2023, compared to the previous year. In 2022, the growth was 18 per cent year-on-year.

South Australia (up 629 per cent) led the largest growth, followed by Victoria (up 393 per cent), Western Australia (up 281 per cent), New South Wales (up 152 per cent) and Queensland (up 150 per cent).

Tesla remained the most popular EV make last year, followed by BYD and Cupra, according to NAB. The median value of the loans were about $70,000.

High energy costs have helped fuel a surge in demand for EVs, solar panels and batteries over the past few years, with banks competing to promote their green credentials and moving to a net-zero world by 2050.

However, while Australia’s big four banks have championed the Paris Agreement, they are under increasing pressure to stop financing new gas projects, which could emit carbon into the atmosphere for years to come.

The Reserve Bank of Australia has noted there are economic risks that accompany hotter temperatures and more extreme weather, and that investors, including banks, were increasingly recognising that carbon-intensive businesses would become less profitable.

The combined sales of electric vehicles has tripled year-on-year to make up 7.4 per cent of all vehicles sold in the country in the past financial year. It was less than 2 per cent in 2021-22.

Crucially, the number of EV charging stations has also grown rapidly – up 72 per cent in the past year, with 800 stations housing 2000 fast plugs around the country. However, the lack of charging infrastructure is still hampering demand.

The RBA said in September that access to green finance needed to grow for Australia to meet its climate emissions targets.

EV financing at the Commonwealth Bank of Australia is also up 235 per cent in the past year. CBA asset finance general manager Chris Moldrich said businesses were bringing forward purchases to take advantage of government incentives.

“Electric vehicles were the fastest growing vehicle type last financial year and Australian businesses are set to play an outsized role in EV adoption across the country,” Moldrich said.

“EV usage is growing strongly as the market matures and becomes more affordable. That’s helped by government concessions and an expanding choice of vehicles beyond luxury models.”

Europcar Australia and New Zealand commercial director Jonathan Dexter said federal and state government incentives, as well as access to cheaper finance, was helping accelerate the transition to EV fleets.

“We have currently 250 [electric] vehicles in Australia, out of a total of 16,000 cars and trucks, with the action to grow that,” Dexter said.

“The strategy globally is to be sitting around 20 per cent within the next year, and in Australia we’re working to accelerate the charging infrastructure at our locations.”

 

Extracted in full from:  https://www.smh.com.au/business/banking-and-finance/banks-boost-green-loans-as-companies-switch-car-fleets-to-ev-20240102-p5eunv.html

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