Incentives for Aussie businesses to go EV

As Australian businesses search for ways to accelerate their progress towards net zero emissions targets, many are choosing to transition their company fleets to electric vehicles (EVs).

20 February 2024

Compared to their petrol-operated counterparts, EVs create less air pollution, while boasting lower energy and maintenance costs.

The growing popularity of EVs is evidenced in recent industry data. In August, the VFACTS National Report on New Vehicle Sales revealed that EVs made up 6.4 per cent of all new vehicle sales in Australia, compared to 3.1 per cent over the whole of 2022.

At CommBank, we've seen the demand for EV financing increase by 235 per cent in the last 12 months.

"Electric vehicles were the fastest growing vehicle type last financial year, and Australian businesses are set to play an outsized role in EV adoption across the country," CBA General Manager Asset Finance Chris Moldrich says. 

While many organisations are exploring the transition to EVs through pilot programs, the graduation to using them on a larger scale presents challenges, including lack of charging infrastructure, affordability and vehicle availability.

According to an East & Partners' Asset Finance Markets report released in June 2023, micro and small businesses are leading the way when it comes to EV adoption with 16-17% already using electric or hybrid vehicles in their fleets, compared to 13.4% of commercial and 9.9% of corporate firms.

In the effort to help companies reach their carbon goals, CommBank is offering businesses a discounted finance rate on green vehicle and equipment purchases.

Whilst we have historically provided Energy Efficient Vehicle (hybrid & EVs) and Equipment Finance solutions, in April we further enhanced our finance offering by providing an additional discount to support companies who add fully electric vehicles (EVs) to their businesses.

"CBA's Green Vehicle and Equipment Finance offers discounts for businesses wanting to upgrade to new and used electric or hydrogen-powered cars, trucks, vans or buses," Mr Moldrich says.

The program enables customers to get up to 1 per cent off the standard rate for new and used electric or hydrogen vehicles valued up to $250,000.

Green Vehicle and Equipment Finance1 also includes discounts for assets such as electric and hydrogen-powered machinery; solar-, wind- and hydro-powered equipment; and charging and storage equipment.

"We are offering this to assist companies in all industry sectors who are focused on lowering their running costs and energy wastage, while also reducing carbon emissions," he explains.

"These offerings support businesses to transition their fleets and equipment to the latest, best-in-class sustainability options, such as electric vehicles and other low-emissions equipment. Our financing solutions cover up to 100 per cent of the purchase price of these assets, as well as supporting infrastructure such as chargers and batteries."

Businesses considering investing in EVs are encouraged to do their due diligence first. This involves understanding the expected life of the vehicle and the best time to purchase, budgeting for electricity usage, and calculating the expected mileage requirements. 

Customers should also check if they qualify for any government incentives and rebates available on the purchase of EVs, such as the Electric Car Discount Bill, which was passed by Parliament in November 2022. 

The legislation provides fringe benefits tax exemptions for businesses and employees on eligible cars for fleets and novated leases.

"There is a wide range of salary earners looking into novated lease options and how they may be able to take advantage of employer arrangements to purchase EVs," Moldrich says.

At CommBank, we are also supporting the development of the charging infrastructure needed to help facilitate the uptake of EVs. 

"While more public sector investment in charging infrastructure is needed, particularly in regional locations, EV usage is growing strongly as the market matures and becomes more affordable." Moldrich adds further developing EV infrastructure will be crucial.

"Investment in this infrastructure is critical to supporting individuals and businesses who adopt EVs as part of their sustainability initiatives, and CBA is keen to provide financing support where we are able," he says.

"As the technology options widen and prices reduce, we expect to see more businesses investing in the EV market."

This article was originally published in The Australian (News Corp) on 26th September 2023.

To learn more from leading experts about what’s important to business and the economy visit CommBank Foresight™ – insights for future-facing businesses.

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