Australian Government to fund low-interest loans on electric cars

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The Federal Government has announced it will help finance low-interest loans to help Australians – including essential workers – buy an electric car.

The Commonwealth Bank will receive $150 million from the government-run Clean Energy Finance Corporation to offer “low-interest” loans for workers earning less than $100,000 a year, plus essential workers such as police officers, teachers, fire fighters and nurses.

It’s claimed the interest rates on the loans will be “up to 5 percentage points lower than standard rates,” the Federal Government said in a media release, and could save buyers “more than $8000 for a $40,000 loan with a seven-year term”.

Funding will go towards “discounted loans for new and used EVs worth up to $55,000, as well as home EV charging equipment,” Minister for Climate Change and Energy Chris Bowen’s office said.

“Discounted loans help remove barriers to ownership, helping more Australians drive cars that can save them thousands of dollars a year,” Minister Bowen said in a media statement.

The loan funding joins other EV incentives offered by the Federal Government, including a Fringe Benefits Tax (FBT) exemption on novated lease purchases for plug-in hybrid and electric vehicles that has proven to cost four times more than forecast, due to high uptake.

It has also put funding towards installing new electric-car charging stations.

The announcement comes amid a slump in sales of electric cars – down 12 per cent since the middle of the year – with Tesla down 36 per cent last month compared to the same period last year.

Meanwhile, sales of hybrid and plug-in hybrid (PHEV) cars are booming – but the Federal Government has not indicated plans to extend the FBT exemption on PHEVs beyond its planned expiry of April 2025.

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