Recent evidence shows a worrying trajectory in the electric vehicle (EV) market, indicating that the government’s objectives for technology adoption are unlikely to be achieved. The Climate Action Plan 2021 stipulated an aspiration to see one million EVs traversing the roads of Ireland by 2030. However, according to the Society of Irish Motor Industry, by 2024, a substantial proportion of cars sold will still be running on petrol, diesel or hybrid technology, rather than being fully electric. A drop in EV sales of 14% in the first few months of this year, compared to the same time in 2023, mirrors a downfall in sales worldwide.
Why is there a reduction in sales? A number of factors have been identified, including the unexpectedly rapid deterioration of costly batteries and the sluggish progress in establishing charging stations, causing ‘range anxiety’ amongst motorists. The decreasing second-hand value of electric vehicles is causing a worry that owners will have to bear with the severe depreciation rates.
While there are some initiatives to solve these problems, such as improvements in battery technology and competitive pricing from Chinese manufacturers, there are still significant barriers. Potential EV owners may be concerned about the sustainable tax benefits of electric vehicles, as the eventual transition to electric could cost the treasury approximately €2.5 billion a year due to the loss in excise duties, VAT, auto tax and vehicle registration tax (VRT). Alterations to the current system seem unavoidable.
The global attempt to put an end to the internal combustion engine is one of the most pivotal technological shifts since the industrial revolution, and is critical in the battle to avert a climate crisis. The issues anticipated for this sector, one of the largest and most vital manufacturing industries in the world, were likely.
It is now crucial to pledge a renewed acceleration of the nationwide charging grid and transparent communication about mid-term tax plans. This will provide the necessary confidence for prospective buyers of EVs, which is evidently needed.