'You should think seriously about an electric vehicle': Bank Australia to phase out loans for gas and diesel vehicles by 2025

A small Australian bank has just made major waves in the global conversation regarding electric vehicles. Bank Australia is expected to announce formally that it will no longer offer loans for gas- and diesel-powered vehicles by 2025.

"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," Sasha Courville, the Bank Australia chief impact officer, recently said in a statement.

"Ultimately, our announcement today is the beginning of a conversation with our customers," the statement continues, "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, which is owned by its 185,000 members, claims to be a financial institution committed to "a fair and inclusive society" and "a world where people and the planet thrive." So this attempt to incentivize people to eschew vehicles that use gas or diesel in favor of EVs is in keeping with the company brand.

However, despite enthusiasm from the likes of Bank Australia and the Greens Australian political party, EVs have not sold well thus far. Reports claim that in 2021, EVs composed just 2% of new car purchases made throughout the country and just 9% of new car purchases made throughout the world.

Still, Bank Australia seems to be attempting to tap into consumer frustration with high gas prices, as it has pitched the move as a means of liberating prospective buyers from "higher carbon emissions and increasingly expensive running costs."

And the bank admits that many car buyers do not want to purchase a new vehicle, either because of circumstances or personal preference. To accommodate the needs of those customers, it will still offer loans for used vehicles with internal combustion engines, even after the 2025 deadline has expired.

"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," Courville said.

According to the Guardian, Bank Australia is expected to officially announce this new policy at a national EV summit on Friday. Australia's climate change and energy minister, Chris Bowen, is likewise expected to speak at the summit.