They’re looking to force customers into electrification…
Recently, Bank Australia made a shocking announcement: it would no longer be issuing loans for any new gasoline or diesel vehicles starting in 2025. The goal is for the bank to reach net zero carbon emissions by 2035 and it will financially coerce customers to do so.
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This move means even plug-in hybrid cars will be out for anyone who insists financing through Bank Australia. We expect this type of policy will be adopted by other banks, if not in Australia than in North America, Europe, and maybe beyond.
Australian car site Drive points out the largest non-bank car loan source, Pepper Money, has decided to offer a carrot instead of a stick to get people to switch to EVs. Anyone who finances a zero-emissions vehicle gets 12 months of free charging, although we wonder what conditions are attached to the offer.
Sasha Courville, Bank Australia Chief Impact Officer, wants customers to know this new policy doesn’t impact used car loans, at least for now. “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,” Dr Courville said at the announcement. See? They can be reasonable, for now.
Obviously, banks are free to set their own lending standards as long as they comply with federal law, at least here in the United States. Customers are also free to find a different lender if the one they’ve used in the past no longer accommodates their needs or preferences. It will be interesting to see how Bank Australia and other institutions which adopt this policy fare in the coming years.
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