OCBC’s Eco-Care Car Loans have surged over sixfold in 2023 compared to their launch in 2021, driven by increased environmental awareness among Singaporeans and the government’s push for electric vehicles (EVs) under the Singapore Green Plan 2030. These loans have achieved an impressive average annual growth rate of 170%.
Opportunities and threats facing financial services providers in the mobility revolution
To meet growing demand, OCBC has expanded its Eco-Care Car Loans scheme to include used EVs up to 10 years old, in addition to new EVs and those under three years old. The Land Transport Authority reported a 50.5% year-on-year increase in EV registrations in 2023, with EVs making up 18.1% of total car registrations, up from 11.7% in 2022. OCBC’s Eco-Care Car Loans offer a preferential interest rate of 2.48% per annum, 0.30 percentage points lower than rates for internal combustion engine cars.
The demand for used EVs is expected to continue growing as they become more affordable. OCBC’s Eco-Care Car Loans for used EVs surged nearly 30 times in 2023 compared to 2021. New EVs are also attracting significant interest, with nearly half of OCBC’s new car loans in 2023 going to EV purchases. Chinese brands like BYD have been particularly popular, accounting for about 40% of these loans.
Sunny Quek, Head of Global Consumer Financial Services at OCBC, stated, “When we introduced OCBC Eco-Care Car Loans three years ago, interest in EVs was low. Our preferential rates helped reduce barriers to EV ownership. Now, with a more mature market and increased demand, expanding our loan offerings to all used vehicles up to 10 years old supports more consumers in transitioning to EVs, aligning with our sustainability strategy.”
In addition to car loans, OCBC offers Eco-Care Home Loans, providing preferential rates for homes with eco-friendly features. Both loan types have seen strong growth, with a 40% year-on-year increase in 2023.
OCBC’s commitment to sustainability extends beyond consumer loans. By the end of 2023, OCBC had committed $56 billion to sustainable financing, surpassing its $50 billion target set for 2025.
