Demand for electric vehicles surges as discounted loans hit market
EV rentals are booming as drivers try to avoid high gas prices ahead of the Easter long weekend, with one site reporting that EV and hybrid bookings are up 388 percent this month compared to last year.
The Iran war caused oil and diesel prices to increase. The fuel excise tax cut will come into effect on Wednesday, but consumers have been told it could take more than a week for it to come into effect in regional areas.
Rowan Lee, president of the Australasian Convenience and Petroleum Marketers Association, said busy urban service stations that sell fast fuel could offer cheaper petrol and diesel within a few days, while more remote service stations could sell more expensive fuel for 10 days or more.
“Currently the excise tax on fuel located underground at your local servo is higher,” he said. “The faster it comes off the ground, the more low-consumption fuel will come in.”
Turo general manager Rob Chan said electric vehicle and hybrid bookings in March were up 70 percent compared to the same period last year, and were up 388 percent year-on-year as of March 15.
“We are seeing a huge increase in bookings for fuel-efficient cars in the market,” Chan said.
“People traveling in Australia who may have never driven an electric vehicle or hybrid before are booking this vehicle.”
Theresa Maitre from Perth used car rental website Turo to book an EV for her trip to Sydney. His decision was largely driven by the cost of fuel.
“I currently drive a Prado and it costs me around $400 to fill up the car, so I thought it might be the perfect time to test an EV and see what it’s like,” he said.
On Wednesday, the federal government’s $33 billion green bank announced it would offer discounted financing for new and used electric vehicles and offer discounts of up to 1 percent for loans issued by Volkswagen Financial Services Australia.
The Clean Energy Finance Corporation said consumer loan customers who purchase eligible EVs priced below the $92,000 luxury car tax threshold could save more than $1,900 on a typical $70,000 loan over five years under the proposal.
Eligible vehicles include Volkswagen, Audi, Skoda, Cupra and Volvo, as well as other eligible EVs purchased through Volkswagen Financial Services’ accredited dealer network.
Chief Executive Richard Lovell said the announcement was unrelated to the current energy crisis, although fuel prices and the shift to renewable energy were “clearly topical at the moment”.
“The reality is that the transport sector will be an increasing source of Australia’s emissions in percentage terms and will likely be the largest source of emissions by sector by 2030,” Lovell said.
The $100 million funding pool follows a similar offering in February, when Clean Energy Finance Corporation partnered with Hyundai Capital Australia to offer a $60 million discounted loan, and previous partnerships with Macquarie Leasing, Metro Finance and Eclipx.
The discounted loans will be financed equally by Volkswagen Financial Services Australia and CEFC, with both offering a 0.5 per cent discount on financing.
Lovell said the plan would also fund vehicle-to-grid (V2G)-enabled models that can act as mobile batteries that can charge into the grid or discharge into the grid.
“By reducing barriers such as high up-front costs and encouraging manufacturers to increase model availability in Australia, we are making it easier for businesses to choose advanced electric vehicles, including those with future-ready features such as V2G,” he said.
“This investment helps reduce costs today and creates a stronger market for affordable, second-hand electric vehicles in the future, making clean transport more affordable for more Australians and their businesses.”
The Albanian government this week halved the excise tax on fuel for three months, reducing gasoline and diesel prices by 26.3 cents per liter.
The government will also scrap the heavy vehicle road user charge of 32 cents per liter for three months in a bid to ease pressure on the transport sector.
The cuts, which begin Wednesday, will cost taxpayers $2.55 billion.
The price of Brent crude oil was at $114 a barrel on Tuesday, nearly double the $60 a barrel it hit before the war.
BloombergNEF research over the past two weeks has shown that global adoption of electric vehicles last year prevented the consumption of 2.3 million barrels of oil per day.
Taylor Blackburn, personal finance expert at comparison site Finder, said its consumer sentiment tracker showed the number of Australians listing fuel as one of their most stressful bills jumped from 11 per cent in January to 19 per cent in March.
“For many Australians, fuel has gone from a routine expense to a major source of financial fear,” Blackburn said.
