Government announces new low-interest EV loans
Buyers could save thousands on the purchase of new and used EVs via government-backed low-interest loansThe federal government has announced a new loan scheme to aid the purchase of battery electric vehicles.
The scheme cuts up to five per cent off the cost of a new and used EV loan and home EV charging equipment for anyone earning less than $100,000 per annum and essential workers (police, nurses, paramedics etc).
Facilitated through the Commonwealth Bank with a $150 million contribution from the Clean Energy Finance Corporation, the scheme is estimated to save buyers $8000 on a $40,000, seven-year EV loan, is capped at $55,000 and officially restricted to BEVs only.
That said, carsales understands the Commonwealth Bank will also offer the cut rate for plug-in hybrids as well – a significant move since PHEVs will lose their exemption from the Fringe Benefits Tax (FBT) under the Electric Car Discount as of April 1, 2025.
BEVs will continue to have access to the scheme, which produces significant savings for workers who buy a vehicle via a novated lease.
The low interest loan scheme should help boost sales of BEVs, which have slowed in their sales growth rate to just 3.1 per cent in 2024.
Most of the growth in electrified vehicle sales in Australia in 2024 have come from PHEVs – off a low base – and hybrids.
The scheme was announced by the Minister for Climate Change and Energy Chris Bowen at a BYD dealership in Sydney this morning.
“Only the Albanese Labor Government is making sure more Australians are able to get behind the wheels of cheaper to run cars and begin saving on their commutes,” he said.
“Discounted loans help remove barriers to ownership, helping more Australians drive cars that can save them thousands of dollars a year.”
The announcement comes in the lead up to the start of Australia’s first-ever New Vehicle Efficiency Standard (NVES) on January 1, 2025, which is set to accelerate the transition to low emission vehicles.
“The Government has listened to industry,” Motor Trades Association of Australia (MTAA) CEO Matthew Hobbs said.
“The settings to decarbonise transport need to be both carrot and stick – not just all stick through the fuel efficiency standard.
“Ultimately, for the automotive industry to succeed in the transition, consumers need to buy the cars.
“As we have seen overseas, targeted consumer incentives are crucial to making that happen – they are a key part of the decarbonisation jigsaw puzzle that we are working to solve.”
Electric Vehicle Council legal, policy and advocacy boss Aman Gaur welcomed the scheme, highlighting its extension to the used car market.
“We are pleased that second hand battery EVs can be purchased with these low interest loans,” he said.
“Most Australians buy used cars instead of new ones, but the pre-owned EV market is still developing so targeted financial incentives and support is required to boost uptake and create a self-sustaining market.”
Related: EV batteries lasting 38 per cent longer than designed
Related: How does fringe benefits tax affect motor vehicles?
Related: No more loans for petrol, diesel or even hybrid cars, says bank
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