EVs are starting to ‘lose their financial advantage’, a leading transport expert has said.
The Government has a target of one million electric vehicles on the roads by 2030 and has offered consumers a raft of financial incentives to encourage drivers to switch.
According to the Sustainable Energy Authority of Ireland (SEAI), last year there were only about 70,000 EVs on Irish roads – well short of the one million target.
Despite this, EV discounts are already being reduced.
“If you use the M50 regularly in an electric car, for example, that could save you a lot of money,” Conor Faughnan told The Pat Kenny Show.
“The toll reduction could be as much as 75% if you’re off peak.
“So, imagine if you use the M50 every day, that’s a chunky amount [and] that’s disappearing from the end of this year.
“Also, at the same time, everybody’s tolls are going to go up; there’s an inflation linked toll that’s in the pipeline.”
'Are they starting to peak?'
In the first three months of 2023, close to one-in-four new cars sold in Ireland were electric.
For the first half of the year, all buyers of new EVs received a €5,000 grant from the Government.
On July 1st, the subsidy was cut to €3,500 and Mr Faughnan said it could dampen the transition.
“EV sales, which have been rocketing up, are they starting to peak or top out a bit?” he said.
“They’re starting to lose their advantage [compared] to the conventional car and I think that’s a frustration long-term [for the industry].”
Mr Faughnan said the Government needs to “move faster” if it is to hit its target of one million EVs and it will need to spend money to do so.
“The consumer is responsive to tax initiatives,” he said.
“They pivoted the whole thing from petrol to diesel 20-years-ago which was the climate advice at the time.
“Tax incentives did it.”
In Norway, the Government has introduced an aggressive subsidy regime for EVs and subsidised the construction of fast charging stations.
Last year, around 80% of all new cars sold in the country were EVs but the transition has led to a significant drop in revenue raised from fuel duty.
“The Norwegians with [€1.28 trillion] in a sovereign wealth fund can probably take a longer view,” Mr Faughnan said.
“In our case, it erodes Government revenue and they will have to reflect on how will they tax motoring and movement [after the transition]?”
Main image: An electric car charging at a charging station in Dublin. Image: Noel Bennett / Alamy Stock Photo