In 2023, EVs comprise roughly 8 per cent of all new cars sold in Australia. This is four times the level just two years ago and market users are confident the growth represents the early stages of a long-term transition in buyer preferences and behaviour.

For instance, speaking at a Clean Energy Finance Corporation (CEFC)-KangaNews roundtable in September, Ellen Liang, co-founder and general counsel at JET Charge in Melbourne, said: “We know from global comparisons that 5 per cent is the tipping point at which disruption becomes inevitable – so we are past the point of inevitable disruption.”

Lenders are enthused about the prospects of green-labelled securitisation using EVs as collateral. Supply might in the first instance come from pockets where takeup is concentrated. For instance, George Pappas, Metro Finance’s Sydney-based treasurer, says around 80-90 per cent of vehicles Metro funds via novated leasing are EVs. “Government incentives are certainly bringing in a higher volume of EVs, especially in the novated space,” he explains.

A more supportive policy environment is clearly an important catalyst for EV takeup. Steven Mixter, group treasurer at Angle Auto Finance, notes that changes to Australia’s fringe benefits tax regime have incentivised EV uptake through the novated leasing channel. The EV component of Angle Auto’s book in this space has increased significantly, with more than 25 per cent of originations now funding an EV, largely as a result of this development.

Combining government incentives with appealing financing options – in terms of price and service – should further boost uptake and give creative lenders access to more collateral.

For instance, Firstmac offers an EV loan product, developed in conjunction with CEFC, and EVs now make up 10 per cent of the nonbank lender’s auto origination.

James Austin, Firstmac’s chief financial officer, adds: “We are competitively priced on EVs, part of which comes from the fact that it is almost zero default risk. Our experience to date is that borrowers buying EVs tend to be of much higher credit quality.”

EV sales are inherently more complex than traditional auto sales, in the sense that the vehicle needs to be supported by charging infrastructure. But this can also offer financiers an opportunity.

Mixter tells KangaNews: “We are developing our EV offering, which includes providing a rate subsidy. There are also opportunities to be smart about how we package up the financing. This means things like bundling in a charger with the loan, to help customers manage the complexities of the EV product.”

The most important factor, however, is likely to be supply. Plenty of Australians want to buy an EV but the range of models available locally has been narrow and largely limited to higher-priced cars. Supply chain disruption has slowed delivery even of the models that have been marketed in Australia. The situation appears to be easing, though market users acknowledge it is a slow process.

Mixter reveals: “We are starting to see EV supply constraints lifting. We have a relationship with BYD’s Australian distributors, for instance, under which we are a local bailment provider. Manufacturers like Chery, MG and others are also building a presence in the A$30,000-50,000 (US$19,000-32,000) price range, which is much more accessible to many than a Tesla.”