Bank Australia will cease funding car loans for new fossil fuel vehicles from 2025 as part of its commitment to achieve net zero carbon emissions by 2035.
Encouraging customers to think about their next vehicle purchase is an important part of Bank Australia’s climate action strategy and it aims to support them to make sustainable choices. Around 43 per cent of Australia’s transport emissions are from passenger vehicles. Electric vehicles are a ready-to-deploy technology so they can be one of the fastest contributors to Australia meeting its climate goals.
Bank Australia Chief Impact Officer Sasha Courville said that encouraging the shift to electric vehicles will be an important step in decarbonising the Australian economy.
“By ceasing car loans for new fossil fuel vehicles, we are sending a signal to the Australian market about the rapid acceleration in the transition from internal combustion to electric vehicles we expect to see in the next few years.”
“We’ve chosen 2025 because the change to electric vehicles needs to happen quickly, and we believe it can with the right supporting policies in place to bring a greater range of more affordable electric vehicles to Australia.
“We’ve been thinking about the carbon impact of car loans since 2004 when we launched our first carbon offset car loan, and we’ve offered discounted interest rates for low emission vehicles since 2018.”
“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.”
Importantly Bank Australia will continue to support customers who can’t yet access an electric vehicle.
“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. We’ll continue to offer loans for second hand fossil fuel vehicles until there is a viable and thriving market for electric vehicles.”
“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.”
Bank Australia is the only bank in Australia with a 2035 net zero carbon emissions target. Bank Australia’s climate action strategy sets ambitious targets to achieve net zero emissions across its operations and lending portfolio.