Cornwall Insight Ireland comments on the half-yearly Irish EV sales

Ireland’s transport sector accounts for one-third of energy consumption and energy-related C02 emissions. This is due to ~93% of the 2.1mn passenger cars registered at the end of 2018 being fuelled by petrol and diesel.

This substantial contribution was something that was acknowledged in the Irish government’s Climate Action Plan 2019. The plan set out a target of 950,000 electric vehicles (EVs) on the road by 2030. It also aims for a complete sales ban on internal combustion engine (ICE) vehicles for the same year. This means that one-third of all vehicles sold between 2020 and 2030 will need to be battery electric vehicles (BEV) or plug-in hybrid electric vehicles (PHEV) to be able to meet this ambitious goal.

Currently, the wider car market in Ireland is down 7.36% on 2018 for the year-to-date (YTD). This reflects wider trends in the European market, which for the YTD is down 3.1% on 2018. The continued downward spiral in car sales can be attributed to a number of factors, such as the legacy impacts of the Volkswagen diesel gate scandal, which has reduced demand for diesel vehicles, and the potential ramifications of Brexit.

Despite this, sales of alternatively fuelled – Battery Electric Vehicle (BEV), Plug-in Hybrid Electric Vehicles (PHEV) and hybrid-electric – passenger cars in Ireland have shown strong growth when compared with 2018 in H119.

Figure 1 compares monthly alternative fuel sales for 2018 and 2019, along with cumulative sales. A total of 9,582 alternatively fuelled cars have been sold for the YTD, a 69% increase on 2018’s total. In each month, sales in 2019 outperformed those in the equivalent month in 2018, a trend that seems likely to continue throughout the remainder of the year.

However, further research into these figures by Cornwall Insight Ireland indicates the majority of sales have actually come from petrol hybrid vehicles. BEV and PHEV sales total just 2,787, which represents 3.5% of all passenger cars sold so far in 2019 in Ireland. This is significantly short of the one-third needed to reach the 2030 target on the Climate Action Plan.

Although the Irish government is behind on its 2030 target it has started to pave the way for increased EV growth putting in place a number of incentives to encourage uptake. For example, Vehicle Registration Tax relief up to a maximum of €5,000 is available for eligible BEVs until the of 2021. Benefit-in-Kind exemption for company car/fleet drivers and reduced Motor Tax have also been introduced.

In addition, the Sustainable Energy Authority of Ireland provides grants for privately bought EVs to reduce the capital cost of purchasing a BEV or PHEV. The level of grant available depends upon the value of the vehicle, with EVs costing over €20,000 qualifying for the maximum grant of €5,000.

Overall, the taxation policy in Ireland is comprehensive but if it is to achieve its 2030 EV target, a comprehensive package of tax relief and incentives, such as free parking, use of bus lanes and reduced rate toll road fees, could be key to creating demand.

However, there will be competition globally for the limited number of EVs being manufactured by automotive manufacturers. For example, KIA’s entire e-Niro quota for 2019 was sold by the end of March. The increased supply of battery packs to allow more vehicle production will be critical to achieving the transition to e-mobility.