The Department of Transport is to cut the grants available to some electric cars – capping the price of vehicles that qualify, and reducing the incentive for plug-in hybrids.
At the moment full electric cars and plug-in hybrids can qualify for grants of up to €5,000 from the Sustainable Energy Association of Ireland.
However, from 1 July, the maximum grant available to plug-in hybrids will be reduced to €2,500.
The department said the change was being made in line with other countries in the European Union due to the fact that “real world” emissions are often higher than those claimed by manufacturers.
Another change set to be introduced will mean that only cars costing less than €60,000 will quality for the grant scheme.
The department said the change would ensure the grant targeted “those who might not otherwise buy an electric vehicle and where the availability of Government support is most likely impact upon a decision to purchase an EV.”
It said €27m was allocated to the grant scheme this year, out of a total of €36.5m which will be spent on promoting EVs and the decarbonisation of transport.
Sales lag ambitious targets
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Yesterday figures from the Society of the Irish Motor Industry showed sales of electric cars continuing to accelerate in the first three months of 2021, rising by more than 71% year on year.
However electric cars still make up only a small proportion of total sales – less than 6% – leaving the country way off the pace required to meet the government’s ambitious target of having one million electric vehicles on our roads by 2030.
According to Simon Acton, chair of the Irish Electric Vehicle Owners Association, many of the things that held back electric car ownership in the past are no longer a problem.
“Certainly going back to 2017, if you were somebody trying to do longer journeys and relying on the public charging infrastructure, then there were quite a lot of issues,” he said. “Thankfully that has improved a lot.”He cited a major upgrade programme by ESB, which has seen the rollout of fast-charging points, with more upgrades on the way.
Meanwhile it is now easier for people, where possible to have a charging point installed at their home – meaning many may not even need to worry about public charge points on a day-to-day basis.
At the same time the cars themselves are improving – with many boasting ranges of more than 300, and even 400kms – comfortably allowing for cross-country journeys on a single charge.
“If you’re going out and buying a car that has a 300km range, realistically how many people do more than 300km a day?,” he said.
So if owning an electric vehicle today is a far more attractive proposition than it was even five years ago – why are sales stuck at such a low level?
“The biggest impediment to EV uptake at the moment is education,” Mr Aston said. “A lot of people still don’t know much about EVsand their capabilities.
“I actually think there’s a huge cohort of people who could already be driving EVs without any issues whatsoever.”
But some feel that even a well-informed public will still be put off electric cars if the market doesn’t offer what they want.
Eamonn Mulholland is an associate researcher with the International Council on Clean Transportation, and has studied the reasons for Ireland’s to-date low EV take-up.”One of the big ones that we’ve been overlooking is this huge discrepancy between the models that are available,” he said. “Because we have this association with wanting to have lots of choice, we’ve really hit a roadblock when it comes to electric vehicles.”He said that, even where people might be willing to go electric, the lack of an option that suits their size, brand or even colour requirements could put them off.
That means a key tool in driving take-up is out of the hands of government – though Mr Mulholland says there are still ways of influencing major, multinational car-makers.
“One way to do it, which the Irish Government has already put forward, is to say that they want to ban the sale of the internal combustion engine by 2030,” he said. “If you get enough countries that are committing to these kinds of bands, then that’s really sending a strong signal towards these automobile manufacturers.”
However most agree that the pricing of EVs is also a major factor.
In addition to the SEAI grant, buyers can also get up to €5,000 in VRT relief when buying an electric car.
But even with this, EVs tend to cost more than comparable petrol or diesel cars.
Eamonn Mulholland suggests that one simple way to counter-act this is to make the lower running costs of an EV clearer to would-be buyers.
“Total cost of ownership, so the amount that you would spend on an EV over its entire life, if you have that as a label on your vehicle – and then you had the same on your diesel Volkswagen car, you’ll be able to compare,” he said.
Norway is leading the world in terms of EV take-up – with more than half of its car sales now electric.
According to Christina Bu, head of the Norwegian Electric Vehicle Association, pricing has been key to its success – but officials there have gone much further than outlining the long-term savings – they’ve made sure EVs are the cheaper option from day one.
“In Norway, we are ‘blessed’ with a tax system where, for many years, we have taxed the purchase of new cars heavily… it’s been looked upon as a luxury good in Norway,” she said. “And removing that tax [from EVs] in the 1990s, and the VAT, we have taxed what we don’t want – cars that pollute – and encouraging what we do want.
“And it’s how these cars compete next to each other, which is really the question.”
Simon Acton from the Irish EV owners association would love to see a similar regime introduced here – but knows it’s unlikely.
“If we could have zero VAT on electric vehicles that would be amazing, but that would be a huge chunk of money for the Revenue to find somewhere else,” he said. “There’s some realism here around the financial situation versus Norway.”
For Ms Bu, however, there isn’t time to wait for a more politically palatable alternative.
“We have to hurry to get to 100% market share in country after country and governments have a responsibility on making that happen as fast as possible,” she said. “Because you always get this debate ‘is it good to incentivise people to buy cars?’… No – but it is good to incentivise people to buy the right cars, so they’re not locked into having to pollute 20 years ahead.”