Petrol cars are getting a best-before date – and it could be sooner than you think.
Less than eight years from now, the sale of new petrol and diesel cars will be banned in at least nine countries.
Another 10 nations, including China and Japan, will join them by 2035.
By 2040, experts say new petrol cars will be significantly harder to find around the world as manufacturers face increasing pressure to stop production.
In the face of these depreciating assets, some financial institutions are withdrawing from the traditional car market to only offer electric and hybrid car loans.
Others offer significant discounts for loans on low- or no-emission cars.
Industry analysts say federal and state governments should also step in with financial assistance, as some European nations have done, to ensure Australia is not left as a dumping ground for vehicles other countries don’t want.
The call comes just days after the Senate approved a tax cut for electric vehicles – the first policy change in what proponents hope is a series to expedite the transport transition.
Swinburne University professor Hussein Dia says despite Australia’s slow uptake of electric vehicles, there is soaring interest in the technology and a growing acceptance petrol and diesel vehicles will soon be phased out.
“Many people recognise today that their investment in petrol vehicles (will depreciate),” he says.
“In 10 to 15 years time, even if someone wanted to buy a petrol vehicle, I don’t think they would be able to find a new one on the market because car manufacturers are under a lot of pressure to stop producing and selling petrol and diesel vehicles.
“China, India, the UK, France: there is a long list of countries that have policies in place to ban the production and sale of petrol vehicles by 2030 to 2040.”
More than 20 Australian lenders, including Westpac, Macquarie and RACQ, now offer lower rates for loans on electric vehicles, including discounts of more than one percentage point in some cases.
Bank Australia took the trend one step further this year, announcing it would no longer offer car loans for new petrol, diesel or hybrid vehicles by 2025.
The company’s impact management head, Jane Kern, says the bank created the policy after feedback from its customers and considerations of the vehicle market and its climate impact.
“We think supporting customers to buy electric vehicles makes a lot of sense, both financially, because of the running cost of electric vehicles, but also because of the future vehicle value,” she says.
Ms Kern adds reaction to the bank’s announcement has been largely positive and she hopes other financial institutions will follow its lead.
Dean and Lalaine Chase, from Portland in Victoria, recently took out a green loan to fund the purchase of a Tesla Model Y.
Mr Chase says the couple initially considered a diesel vehicle for his wife’s 100km commute to Mt Gambier, in South Australia, but they ultimately found an electric vehicle more financially appealing.
“We did the numbers on whether it was worthwhile and, because of the mileage we do, it is very much worth it,” he says.
“My wife is going to be doing about 40,000km a year and if you calculate that on the average diesel costs versus charging an EV at home, it’s a lot cheaper.”
But while electric vehicle purchases are working out for some Australians, others are finding it hard to overcome the up-front cost.
A survey of more than 5000 Australians by CoreData for Real Insurance found 42 per cent of Australians were actively considering an electric or hybrid vehicle for their next car but 45 per cent didn’t think they could afford one.
Melbourne University senior lecturer John Stone says the high price of electric vehicles in Australia – with few available for less than $50,000 – is holding back the market.
“If we are going to make the change, we are going to need to look at how we reduce costs in the same way that European countries have done in recent years,” he says.
So far, the ACT has led Australia’s transition to electric cars, posting the highest sales in the country at 9.5 per cent of new vehicles in 2022.
The territory also offers a range of incentives to electric car buyers, including discounts on registration and stamp duty, and zero-interest loans of up to $4092.
Good Car Company co-founder Anthony Broese van Groenou praises the policy, saying it mirrors similar incentives in Norway, where electric cars represent more than 80 per cent of new vehicles sold.
He says the federal government should introduce means-tested, low-interest loans for electric vehicles to help Australia catch up to the rest of the world and help low-income families with long, expensive commutes.
“Norway have financing mechanisms that help reduce that up-front cost and people win. We need that here as well.
“It wouldn’t need to come as a cost to taxpayers – it would use our ability to get money at a low rate and allow those who most need it to benefit from that.
“Parts to maintain those petrol vehicles are going to be de-prioritised as well and they’re going to become more expensive to run.”
In addition to making the recent fringe benefits tax cuts for low-emission vehicles, the federal government is considering submissions it received on a national electric vehicle strategy consultation paper.
– AAP
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