THERE IS no short-term economic case for subsidising the purchase and use of electric vehicles (EVs), either with funding from the taxpayer or the electricity consumer, according to a recent report on energy policy issued by the Irish Academy of Engineering.
The Government’s plans for the mass deployment of EVs, with a target of 10 per cent of all vehicles in the transport fleet to be powered by electricity by 2020, should be put on hold pending further technological developments and more competitive pricing, a spokesman for the academy suggested.
The relatively small reduction in emissions from using EVs, as opposed to equivalent diesel cars, makes the plan economically impractical, the report argues, as does the likelihood that the vehicles will be high cost and have limitations on their use when they are launched commercially.
The report, Review of Ireland's Energy in the Context of the Changing Economy, makes a cost-benefit comparison between the inter-urban EV (with longer journey capabilities) and an equivalent diesel car (1,000 to 1,400cc engine, four full passenger seats and a boot) and also compares the short-trip, city EV with its diesel counterpart.
Assuming an average of 10,000 inter-urban EVs per annum over the 10 years, each covering 10,000km a year, the negative cost differential is close to €120 million, factoring in both the cost of subsidies and the loss of excise and VAT to the exchequer, according to the report. While the use of short-trip, city EVs would seem a more attractive and practical consideration, the cost/benefit economics are still poor, with the cost to the taxpayer nearing €70 million.
And these presumed numbers of EVs on the road are much lower than Government projections. Achieving a target of 200,000 vehicles on the road by 2020 would cost the exchequer in excess of €1 billion, according to the Academy spokesman, who noted: “In cost-benefit terms, from the taxpayer’s perspective, equivalent CO2 emission quotas can be purchased in the market at a fraction of the cost of subsidising battery EVs.”
The report also points out that, while many European countries obtain very high percentages of their electricity from non-fossil fuel sources, Ireland, by contrast, obtains more than 80 per cent of its power from coal, gas, oil and peat. This implies that electric cars using grid electricity in Ireland are, in effect, using an 80-90 per cent fossil fuel mix with the emissions transferred from the highway to the power station.
The situation will only change slowly, the report predicts, as Ireland alters its primary energy mix and generation technology over several decades. Equally, European nations that actively promote an EV strategy are in many cases home to large car manufacturers, increasing the economic appeal for those countries.
The report concludes that the current policy of using enhanced taxation instruments to reduce emissions and fuel consumption is effective and remains the best means of achieving these particular goals in the short term.
Its findings are in line with a recent analysis of the short-term viability of an electric vehicle strategy in the UK by Richard Pike, chief executive of the Royal Society of Chemistry.
Bernard Potter is editor of the Engineers Journal