CEFC backed green loan scheme hopes to boost EV uptake | RenewEconomy

CEFC backed green loan scheme hopes to boost EV uptake

New green loan scheme backed by Clean Energy Finance Corporation to offer cheaper finance to buy and lease low and zero emissions vehicles.


One Step Off The Grid

A new green loan scheme backed by the Clean Energy Finance Corporation is hoping to boost the uptake of electric cars in Australia, by offering consumers cheaper finance to buy and lease low emissions vehicles.

The initiative, called Metro Green, is being launched by Australian broker Metro Finance, and will use up to $50 million in CEFC finance to offer customers a 0.7 per cent discount on cleaner “best in class” cars, as well as EVs and hybrids, the CEFC said on Tuesday.

The small concession offers a welcome incentive for EV uptake in Australia, where virtually none has existed, and market growth has lagged embarrassingly behind other developed countries.

It comes at time when the range of affordable EVs being offered to Australian consumers is set to expand, with the new model Nissan LEAF – the latest version of the world’s best selling electric vehicle, pictured above – due to arrive here in the second half of 2018, and Tesla’s mass market offering, the Model 3 slated to follow not long after.

CEFC CEO Ian Learmonth said reducing transport-related carbon emissions was a critical focus area for the CEFC, particularly through its Sustainable Cities Investment Program.

“Transport is responsible for around 16 per cent of Australia’s greenhouse gas emissions. This could be dramatically reduced if businesses replace their old vehicle fleets with best-in-class models,” Learmonth said.

“The scale of emissions reduction that can be achieved through upgrading vehicles with already available technology is staggering,” he added.

“National Transport Commission figures show that if Australian consumers had purchased vehicles with best-in-class carbon emissions in 2016, national average carbon emissions would have been reduced by 59 per cent.

“Those figures don’t include electric vehicles, which have zero tailpipe emissions.”

Metro Finance chief Phillip Crossman said the company hoped to use the Metro Green product to put more customers into low emissions vehicles by both educating and incentivising customers.

“To make it easier, we’re providing our brokers with statistics and standards on vehicles and equipment that qualify for the discount. That way they can demonstrate to customers what makes a
‘green’ choice a good choice,” Crossman said.

A special website will also be set up, allowing brokers to quickly identify if a vehicle qualified for the discount. If not, the system would recommend alternate qualifying lower emissions vehicles.

“In this way, Metro Finance will be leading the movement to promote green finance within the transport industry which it regards as an inevitable progression,” Crossman said.

This article was originally published on RenewEconomy’s sister site, One Step Off The Grid, which focuses on customer experience with distributed generation. To sign up to One Step’s free weekly newsletter, please click here.

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  1. Joe 3 years ago

    Craig ‘EV’ Kelly will be frothing when he sees this article.

  2. Guy Stewart 3 years ago

    Am I missing something?

    “a 0.7 per cent discount on cleaner “best in class” cars, as well as EVs and hybrids”,

    Is that off the price of the car, or the interest rate? Because unless they tell us the actual interest rate they are offering, that’s pretty useless info.

    Unless they mean if I buy a new electric car with this finance company, instead of paying $60,000, I will only be paying $59,580.

    I think I’ll hold my enthusiasm. This is a $50M fund, so I must be missing something.

    • Phil Shield 3 years ago

      The 0.7 percent discount is on the interest rate. So if they were offering 7% for a normal car, it would be 6.3% for an electric car. In this case it would be a 10% discount on your interest bill.

  3. Malcolm Scott 3 years ago

    About 12 mths to go to an election it seems. All sorts of Clayton’s ineffective policies. Minister Hunt had a few of these do nothing for EV initiatives in his last year as environment minister and Frydenberg claimed another government CEFC scheme through a different organisation a little while ago that had an even less of a contribution to making the world a better place and to accelerate the transition to ultra low emissions transport and mobility.

    And of course the government profits from this initiative as the government sets a hurdle rate above the bond rate for these CEFC loans.

    Business for the shareholders is already obligated to buy the most cost effective vehicle, which often means Corolla, Mazda 3, Hyundai I30 like vehicles.

    A 0.7% discount off is not going to change a buying decision to a Prius or sub 100g/100km vehicle. It’s like the shame deals for buying electricity. It’s not going to change a Clio buyer into a Zoe buyer, or a Corolla buyer into a Leaf buyer, or a VW Caddy into a Kango ZE buyer, or to change an Outlander to a PHEV version, or for someone to ask Toyota for a Prius plug-ing, et al. People who buy a Tesla do it for many reasons, and 0.7% is not going to create an additional sale.

    This scheme is also regressive. A challenged small business gets only a small benefit. A prosperous business owner choosing a ‘lifestyle’ vehicle awards themselves a much more expensive vehicle and thus gets a greater benefit.

    To achieve the real objective of re-engineering supply chains to pull out costs, developing new sales business models, and creating volume that reduces costs, the purchase price for a Zoe needs to be $25k and Leaf ~$30k (base Clio is <$20k, Corolla ~$24k).

    The policy needs to rebate or credit the buyer something like $25k on purchase up to a vehicle price of say $60k sliding to zero by about year 2025 (only interested in mainstream market, not the lifestyle market). That policy might also address incentives for the supply chain and sales business model.

    Easily funded from a differentiated zero additional revenue Luxury car tax and state government charges. John Howard used industry sector transition incentives. It can be done again.

    The public should be demanding an audit of these schemes. Just how many buying decisions were actually changed that had a meaningful contribution to reducing our ~70Mt CO2e emissions. Not just those who got a discount on their already made decision or where attracted to this financing partner

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