Demand for OCBC’s eco-care car loans have increased over sixfold in 2023 since its inception in 2021. OCBC reports that the value of EV loans has achieved an average annual growth rate of 170%. Demand is propelled by Singaporeans’ increased environmental awareness. In addition, the government is heavily promoting EVs via the Singapore Green Plan 2030 that was announced in 2021.
As more used EVs over three years old enter the market, OCBC has expanded the range of electric vehicles that can be financed under the OCBC Eco-Care Car Loans scheme to meet rising demand. Alongside new EVs and used EVs under 3 years old, financing is now offered for used EVs up to 10 years old. The number of EVs registered in 2023 climbed 50.5% year-on-year, according to the Land Transport Authority. The adoption rate of EVs also rose to 18.1% of total car registrations in 2023, up from 11.7% in 2022.
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OCBC’s eco-care car loans scheme provides an additional incentive for customers with a preferential interest rate of 2.48% per annum. This is 0.30% lower than the loans offered for internal combustion engine cars.
Strong demand for EVs set to continue
As the EV market continues to mature, used EVs will become increasingly available. Demand is expected to be healthy as they are a more affordable EV option. Recent trends reflect this fact. OCBC eco-care car loans extended for used EVs have surged nearly 30 times more in 2023, compared to 2021.
Sunny Quek, Head of Global Consumer Financial Services, OCBC said: “Three years ago when we introduced OCBC eco-care car loans, consumer interest in EVs was still low. Knowledge about EVs was not as widespread. We wanted to do our part to get the momentum going by providing that additional incentive, in the form of a preferential interest rate for OCBC eco-care car loans. It has helped to reduce the barriers to entry to owning EVs.
Three years on, the EV market has become more mature and demand has been increasing. More brands and used EVs are entering the market, making them more affordable. Correspondingly, OCBC eco-care car loans have seen a strong growth trajectory. By expanding the loan to all used vehicles up to 10 years old, we will be able to meet this demand and support more consumers who want to transition to EVs. This is in line with our corporate strategy, where sustainability is a key pillar.”
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By GlobalDataBesides car loans, OCBC also offers OCBC Eco-Care Home Loans. Homeowners who incorporate eco-friendly elements into their homes will be given preferential interest rates and bill rebates on their electricity plan.
OCBC: supporting the green transition
Driving the transition to a sustainable low-carbon world is a key pillar in OCBC’s corporate strategy. OCBC has made good progress on this front.
In May 2023, OCBC unveiled science-based decarbonisation targets for six high-emissions intensive sectors. These include Power, Oil and Gas, Real Estate, Steel, Aviation and Shipping. In addition, it committed not to extend project financing to upstream Oil and Gas projects that obtained approval for development after 2021. This is on top of its Oil & Gas sectoral target of 35% reduction in absolute emissions by 2030.
As at end-2023, the bank had a total of $56bn in sustainable financing commitments. This surpasses its target of building a $50bn sustainable finance portfolio by 2025 two years ahead of schedule.
