The Clean Energy Finance Corporation (CEFC) aims to get more Australians on the road to owning an EV with a commitment of up to $20.5 million to make green car loans cheaper through Taurus Motor Finance.
The commitment from the CEFC will support an estimated $100 million of green finance for Australian consumers to purchase EVs.
Eligible borrowers will receive discounted interest rates on green car loans, compared to the rate for internal combustion engine (ICE) vehicles. The investment has the potential to accelerate EV uptake and drive decarbonisation of the emissions intensive transport sector by tapping into growing demand in Australia for EVs.
It will further influence the Australian finance sector by demonstrating the value of green car loans.
“Australia faces a significant challenge to decarbonise its economy,” says CEFC debt markets head Richard Lovell.
“The transport sector is the third largest source of national greenhouse gas emissions and our efforts to get to net zero emissions by 2050 must include a focus on the way we travel.
“As more Australians consider buying an EV to cut their carbon footprint, more affordable finance will provide a powerful incentive to convince them to commit,” Lovell adds.
“Increasing the number of EVs on Australian roads will also foster the development and roll out of the smart charging infrastructure needed to support them. More accessible EV chargers will in turn encourage more people to consider switching to an EV.”
Australia is well behind many other countries on the roll out of EVs and, according to the Electric Vehicle Council, EVs account for just 3.39% of new car sales in Australia.
The Arcadis Global Electric Vehicle Catalyst Index 2021 ranked Australia last or near-last out of 12 countries in all criteria. Australia was the only market assessed as being poor in each category, including availability of EVs and charging infrastructure. The Index estimated that in 2030 Australia will have just 20 EVs per 1000 people, compared with 100 per 1000 people in Italy and 120 in California.
Research shows that Australians are increasingly considering an EV purchase for their next car. Challenges that have slowed the growth of Australia’s EV market include fewer models for sale compared to international markets, with some popular models selling out their full annual allocation within hours of becoming available.
The Arcadis index reported that Australia had just 30 EV models available, compared with 154 in Hong Kong and 100 in Norway.
The discounted green car loan offered by Taurus extends to all battery electric vehicles (BEVs) and
high performance plug-in hybrid vehicle (PHEV) models under $90,000, including BYD PHEVs through EV Direct.
“At least half of all car buyers in Australia finance the purchase with a car loan,” says Lovell.
“Working with Taurus to establish a new green car loan has the potential to improve EV availability because it offers Original Equipment Manufacturers (OEMs) the certainty that potential customers can access finance to buy their cars.”
Taurus founders and co-chief executives David Giffin and Satyajit Pal say they are delighted to receive this support from CEFC which will support the work they are doing with EV Direct to accelerate the transition of Australian consumers to a cleaner and greener future.
“We also appreciate recent legislative action by the Federal Government through the Treasury Laws Amendment (Electric Car Discount) Bill 2022 and are working actively to introduce a Taurus novated lease product.”
EV Direct managing director and chief executive Luke Todd says cost has been one of the biggest barriers to EV uptake in Australia.
“For the first time the Australian consumer has a genuine choice between an EV and an ICE vehicle and we are excited to support this green funding initiative,” Todd explains.
“The CEFC investment further strengthens our portfolio of investments to reduce emissions in the transport sector and boost EV uptake.”
CEFC helped finance more than 2300 EVs to September 30 this year, and it has also invested more than $54 million in large-scale EV projects, including EV charging infrastructure through Jet Charge, replacing diesel mining trucks with battery electric systems with 3ME Technology and helping finance Australia’s first electrified bus fleet with Zenobe.
