Navigating transitional Challenges for the Industry

Panel: Jacqueline Sihaphone, Sustainability Manager, Toyota Finance Australia; Eoin MacNeill, Vice President, Hertz; Chris Murphy, Head of Risk & Operations, Volvo

• There’s now a diversity of ownership models and how they’re financed. For EVs and hybrids ownership model is shifting away from buying a car to just being able to use it when you need it. The ability of finance companies to meet consumer demand for these finance models is key to driving transport transition.

• Finance companies have to develop an asset/equipment management skillset, not just credit provision.

• Government incentives, like the FBT exemption supercharged consumer take up.

• Issues that need to be addressed include charging infrastructure, particularly at airports for rentals as noted by Hertz, as well as price volatility for EVs which affect the ability to finance. Range anxiety is an ongoing concern among consumers.

• Customers are reluctant about the risk. Volvo mentioned how newer electric trucks will have more batteries, which will make them heavier, which has a baring on road regulations etc. Customers do not want to take that risk and want to be able to get out of an ownership/financing arrangement if it gets untenable. Volvo mentioned how the truck sector will be hugely important in reducing emissions.

• Toyota’s philosophy here is balancing risk, reward and consumer preferences. Everything in harmony.

• The key is developing the finance models that meet consumer demands and ownership patterns emerging in the EV space, reflecting how consumers actually use these assets.

• Funding will be difficult for these models, as methods like securitisation require strict ownership arrangements be secured.