By 2035, the ACT Government is banning the sales of new petrol and diesel vehicles, also known as internal combustion engine (ICE) vehicles. The transition is part of a wider Climate Change Strategy to hit net zero emissions by 2045. For many, this move may be controversial, for others, it is a welcome shift towards decarbonisation.
If you’re a petrol car owner, you may be wondering what the phasing out of ICE vehicles might mean for driving them beyond 2035 and how it’ll affect their value. And if you’re considering buying an ICE car, will it be a wise investment in the long term? Let’s find out.
A slow phase-out of petrol car supply
Although Australians EV uptake has been slower than the rest of the world, it’s gaining pace, with the ACT reporting the highest sales in the country at 9.5% of new vehicles in 2022. A major reason for this, is the ACT currently has the most generous government incentives nationwide.
New ICE cars will undoubtedly be harder to come by in the coming years. Not only are car manufacturers facing pressure to pivot solely to making EVs, lenders are also withdrawing loans for petrol cars. Bank Australia has announced it would no longer offer car loans for new petrol, diesel or hybrid vehicles by 2025.
According to The Driven, one million new vehicles are purchased annually in Australia, and 600,000 are retired. So, while ICE cars will not become immediately obsolete, they will gradually be replaced by EVs over time.
Will there still be a used petrol car market beyond 2035?
Despite the rulings, you will still be able to drive and refuel your petrol car beyond 2035. Trevor Worthington, vice president of ICE product programs for Ford, told CarsGuide that he predicted there’d still be markets selling ICE vehicles into 2040.
As for how much they will retain their value, it’s not possible to say yet. According to the Electric Vehicle Council’s Consumer Attitudes Survey 2021, 54% of respondents were actively considering an electric or hybrid vehicle for their next car, however, many indicated the upfront purchase price was still a concern. Although EVs are becoming more affordable, their higher prices may keep the second-hand ICE vehicle market relatively buoyant post-2035, which could mean your car won’t lose too much value.
Investing in an EV is a logical step to future-proofing your transport
If you’re in the market for a new car now, investing in an EV is a smart move and infrastructure is rapidly advancing. In its National Electric Vehicle Strategy, the Australian Government has pledged to increase the supply of affordable and accessible electric vehicles while rapidly expanding the nation’s public charging network.
Cleaner and more energy-efficient, EVs not only reduce greenhouse gas emissions and air pollution, they have substantially lower running costs compared to ICE cars. For instance, the National Electric Vehicle Strategy report states the average petrol car costs around $2,400 in fuel a year, while an EV will cost around $400 in energy.
As regulations and consumer preferences evolve, switching to an EV now will put you on the front foot of Australia’s changing automotive landscape. By embracing this greener, more technologically advanced and economically sound method of transportation, you will be driving sustainably into 2035.
Summary
- Sales of new petrol and diesel vehicles are being banned in the ACT by 2035.
- ICE vehicles are being phased out as manufacturers pivot to making EVs and lenders stop offering loans for them.
- Driving and refuelling your petrol car beyond 2035 will still be possible.
- There will still be a market for second-hand ICE cars beyond 2040, although it’s uncertain how much they will hold their value.
- If you are currently in the market for a new car, buying an EV is a logical step towards future-proofing your method of transportation as it supports local and national environmental goals.
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Sources
https://bankaust.com.au/blog/bank-australia-to-cease-loans-for-new-fossil-fuel-cars-from-2025
https://www.climatechoices.act.gov.au/policy-programs/act-climate-change-strategy
https://www.canberratimes.com.au/story/7997194/why-petrol-cars-could-be-bad-investments/
https://www.dcceew.gov.au/sites/default/files/documents/national-electric-vehicle-strategy.pdf
