Singapore banks latch onto electric-car market
TWO of Singapore's largest lenders are banking on the local electric vehicle (EV) market following the return of Tesla, whose sales portal went "live" in the city state last week.
On Monday, OCBC announced a new strategic partnership with local EV solutions firm Charge+ to encourage the widespread adoption of EV usage among its clients in Singapore.
The collaboration aims to "accelerate the 'greening' of Singapore's land transport sector", said the two parties in a joint press statement.
Under its memorandum of understanding signed with Charge+, the bank intends to encourage its property developer and property owner customers to install charging points at their premises.
OCBC will implement digital payment solutions for Charge+ charging points, as well as look into the financing for the infrastructure.
Both parties also plan to develop incentives to encourage EV buying and the usage of Charge+ charging points. This could possibly include free charging across Charge+'s network of charging points for OCBC customers who take out a car loan with the bank to purchase EVs, the bank told The Business Times.
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Charge+ serves a range of property segments comprising residential, commercial and industrial buildings.
The operator and provider of EV charging solutions aims to install 10,000 EV charging points islandwide by 2030, in line with the government's revised target of 60,000 EV charging points as part of its Singapore Green Plan 2030 plans unveiled last week.
Last year in June, OCBC announced it was aiming to expand its sustainable finance portfolio to S$25 billion by 2025. Clean transportation was among the sectors highlighted by the bank for strategic importance, considering its high growth potential for sustainable financing.
Elaine Lam, head of global corporate banking at OCBC, said the bank's new collaboration marks its efforts to offer beyond-banking solutions through partnerships and co-creating innovative ideas with corporate clients.
"For EV adoption to pick up, the supporting charging infrastructure has to be in place and Charge+ has very quickly become a leader in this space. Just having the infrastructure is not good enough. There must be public adoption to enable a clean energy transportation system too. OCBC can therefore play the role as a meaningful financial services enabler in the EV ecosystem," said Ms Lam.
"We are excited to support the broader vision to bring others onboard the ecosystem, including property developers and owners, EV distributors and manufacturers, and utilities companies," she added.
In a separate news release, DBS on Monday said it was launching Singapore's first green car loan to encourage car owners to reduce their carbon footprint.
It will be available from March 1, 2021 to all customers purchasing new and used electric and hybrid vehicles at the interest rate of 1.68 per cent per annum.
This preferential rate is already available to Tesla car buyers, as DBS is the American EV company's preferred financing partner in Singapore.
Citing a March 2020 pilot impact measurement study by DBS and Netherlands-based social enterprise Impact Institute, the bank said lending to the EV sector instead of the combustion engine vehicle sector has lower environmental and social costs of 40 per cent and 16 per cent, respectively.
DBS head of consumer banking Jeremy Soo noted that just 6.8 per cent of the car population in Singapore comprises electric and hybrid cars, based on data from the Land Transport Authority.
This indicates "much room for growth" when compared to Norway where electric cars make up 54 per cent according to the World Economic Forum, he said.
"We hope the introduction of Singapore's first green car loan will help alleviate affordability concerns and be the tipping point for car buyers including electric or hybrid vehicles in their consideration set," said Mr Soo.
"Across the organisation, we've been single-mindedly pursuing our sustainability agenda - where we hope not just to lead by example but also make it easy for our stakeholders, customers and communities to participate in sustainable development together."
DBS this month raised its sustainable finance target for 2024 to S$50 billion, which is well over twice the lender's previous S$20 billion target for the same year.
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