Bank of Australia eliminates loans for new diesel and petrol cars

Cars and buses in Sydney, Australia, on Monday, May 25, 2020. Authorities in the country are looking to establish a National Electric Vehicle Strategy.

Brendon Thorne | Bloomberg | beautiful pictures

An Australian bank plans to stop lending to new petrol and diesel cars as the country tries to encourage the use of electric vehicles and catch up with other developed countries.

In a statement on Friday, the Bank of Australia said it would phase out loans for new fossil fuel-powered vehicles from 2025. Sasha Courville, its impact director, said that date had already passed. was chosen “because the change to electric vehicles needs to happen quickly.”

The bank, Courville added, believes this can happen “with the right policies in place to bring more affordable electric vehicles to Australia.”

While there will be no longer loans for new internal combustion engine vehicles – including hybrids – from 2025, Bank of Australia will continue to provide those loans for used vehicles.

“We will continue to provide loans for used fossil fuel vehicles until there is a mature and viable market for electric vehicles.”

On that front, Friday also saw the Australian government provide information on plans to establish a National Electric Vehicle Strategy for the country, with a document discussing the matter to be released for consultation.

Read more about electric vehicles from CNBC Pro

In a statement, the government said Australia was “significantly behind when it comes to electric vehicles.”

It added that, at just 2%, the country’s consumption of new low-emission vehicles is “nearly five times lower than the global average – national leadership is needed to ensure we not continue to be left behind.”

Against this backdrop, we believe now is the time for an orderly and rational discussion on whether vehicle fuel economy standards can help improve the delivery of electric vehicles in the coming years. the Australian market, to address the cost-of-living impacts of inefficient cars, and to reduce emissions from the transport sector.”

The bank is owned by Australian customers dating back to 1957. According to its Statutory Financial Statements for 2021, it said total assets had grown to AU$8.5 billion ($5.9 billion). ), with an after-tax profit of A$40.7 million.

It is not unique in its strategy towards fossil fuel-powered vehicles. In 2020, Denmark’s Merkur Cooperative Bank said it would stop funding new diesel and diesel cars.

All of this comes as Europe’s major economies are planning to phase out diesel and gasoline-powered road vehicles.

The UK wants to stop selling new diesel and petrol cars and trucks by 2030. From 2035, all new cars and trucks must be free of exhaust emissions. European Union – which the UK leaves on January 31, 2020 – are pursuing similar goals.

According to the International Energy Agency, electric vehicle sales will reach 6.6 million units in 2021. In the first quarter of 2022, electric vehicle sales reached 2 million units, up 75% from the first three months of the year. 2021.

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