In an Irish context, you can practically set your perpetual calendar against the date that electric car sales started to fall from their post-pandemic acceleration. It was July 2023, when the Irish Government pulled back on incentives for buying a new EV.
In fairness to the Government, the pullback was not a total one, nor was it dropped into the laps of consumers with quite the same suddenness that it was in Germany, but trimming €1,500 off the SEAI grant for buying a new EV was enough to have Irish car buyers retreating from their burgeoning love affair with electric cars.
Since then, it has seemingly been all downhill. So far this year, the market for new cars in Ireland (going by registrations recorded by the Society of the Irish Motor Industry, or SIMI, which are not necessarily the same thing as actual sales, as some of the registrations will be dealer demo vehicles and other intra-industry registrations), has fallen by 0.3 per cent up to the end of July, while sales of electric cars have fallen by a whopping 25 per cent – and this in the face of genuinely more affordable all-electric models arriving on the market.
So are we seeing consumers rejecting the whole idea of electric motoring?
Not quite. Ireland’s figures are bad and there certainly seems to be a fairly significant gap between what carmakers are offering and legislators are aiming for, and what the public believes. The dearth of readily available charging points is still definitely a brake on enthusiasm, but there are other more worrying factors at work.
According to a survey by the AA, many people are being misled about the facts and real-world performance of batteries in electric vehicles. This is also having a knock-on effect on the used car EV market. The AA Ireland survey showed that 53 per cent believed that EV batteries last less than 100,000km, which is about six years of driving for the average motorist in Ireland.
As the AA’s Jennifer Kilduff points out: “This doesn’t align with the eight year and 160,000km warranties that many manufacturers are offering. We’re quite surprised with people’s perception of EV batteries. It is disappointing to see that these myths are continuing to circulate. Modern batteries have sophisticated battery management systems that increase the life of the batteries to not just many years, but potentially a few decades. When they complete their purpose in cars, they will be used in energy storage projects, before finally being recycled. It also needs to be pointed out that an EV battery is not just one big chunk of metal. It is made up of many modules that get combined into a battery pack. In most instances you would not replace the whole battery if there was an issue, you’d replace the individual module or modules at a fraction of the cost.”
In many ways, the car makers have only themselves to blame here. Repeated queries by The Irish Times, of multiple car companies, about precisely how much battery replacement or repair might cost have been met with broad platitudes rather than precise answers. That lack of precision allows doubt and misinformation to fester.
As a snapshot of the electric car market, and the wider public perceptions of such, that’s not a strong look. However, that’s equally not the full story. Ireland’s 25 per cent fall in EV sales is bad, but taken in the context of a 46 per cent rise in 2023, and an 81 per cent rise in 2022 (albeit starting from very low figures) it’s not actually that bad, and can be seen for what it is – a gap in consumer confidence, rather than the all-out rejection that some would paint it as.
Equally, in global terms, electric cars are still very much on the rise. According to a new report from the International Energy Agency (IEA), 14 million new electric cars were registered around the world in 2023, 95 per cent of those in the US, China, and Europe. Electric car sales, globally, were up by 35 per cent last year, and were six times higher than they were in 2018. Indeed, the IEA points out that on average, 250,000 new EVs were registered every week in 2023, the equivalent of a full year’s sales a decade prior.
Now, the IEA counts plug-in hybrids as being “electric cars” so the figure is somewhat skewed, but according to the agency, battery-electric cars make up 70 per cent of those figures, and: “These trends indicate that growth remains robust as electric car markets mature.”
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Not that the IEA is blind to the issues of falling EV sales in some markets, but the agency believes that the solution is a simple one: don’t cut back on incentives. According to the IEA report: “The phase-out of several purchase subsidies in Germany slowed overall EV sales growth. At the start of 2023, plug-in hybrid electric vehicle [PHEV] subsidies were phased out, resulting in lower PHEV sales compared to 2022, and in December 2023, all EV subsidies ended after a ruling on the Climate and Transformation Fund. In Germany, the sales share for electric cars fell from 30 per cent in 2022 to 25 per cent in 2023. This had an impact on the overall electric car sales share in the region. In the rest of Europe, however, electric car sales and their sales share increased.”
Those German figures had quite the stark effect on overall European electric car sales. According to eco think tank Transport & Environment (T&E), in Germany, electric car sales have fallen by 16.4 per cent. That doesn’t sound dramatic, but the German car market is so large and so important that the reduction is holding back EV sales across the Continent. Research by T&E has shown that the fall-off in German electric car sales means that EV sales across Europe grew by a mere 1 per cent in the first half of 2024 – take out the German figures and that would have been a 9 per cent increase.
That’s because in other markets – France, Italy, and Belgium for example – EV sales are roaring ahead, and it’s likely no coincidence that in both France and Italy, new and improved incentives for EV purchasing have been introduced. In France, there’s a new system that’s designed specifically to put lower-income households into electric cars, while in Italy new EV incentives were introduced in June. In Belgium, new company car rules helped to propel a 47 per cent increase in EV sales up to July, while in the UK, the “Zev Mandate”, which enforces a minimum number of new electric car sales per manufacturer, there has been a 9.2 per cent boost in sales.
We need to go beyond a simple restoration of EV grants to their previous levels and explore targeted incentives
According to T&E: “The abrupt removal of purchase subsidies contributed to a 16.4 per cent decrease in BEV sales in Germany in the first half of 2024. A stable and supportive regulatory environment is key to avoiding stagnation and locking in investment, [T&E has] called on German lawmakers to follow Belgium’s company car policy which sets attractive depreciation rates for electric cars and phases out depreciation for combustion engines. As a result, BEV sales in Belgium increased.”
So, while electric car sales are certainly less than they were, it’s certainly not true to say that they’re on a downward curve. According to the IEA: “Electric car sales remained strong in the first quarter of 2024, surpassing those of the same period in 2023 by around 25 per cent to reach more than three million. This growth rate was similar to the increase observed for the same period in 2023 compared to 2022.” Much of the growth comes from China, where there are both impressive incentives and a more mature charging network.
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What’s to be done in Ireland? According to David Savage, European vice-president of Geotab – a telematics and connected transport provider – it’s simple enough. Be smarter with incentives. “July is now the fifth month in a row where EV sales in Ireland have fallen, highlighting the need to reset Ireland’s EV strategy in Budget 2025 later this year in the hopes of having any chance of meeting the Government’s target of having 945,000 zero-emission vehicles on the roads by 2030,″ said Mr Savage.
“July is traditionally a bumper month for car sales in Ireland, but drivers are clearing voting with their wallets by opting for petrol and diesel vehicles instead, with EV sales lagging behind. We have to take a step back and look at the international picture, where EV sales are continuing to rise in countries like the UK and ask ourselves why Ireland can’t deliver similar growth. For example, 133,000 new electric cars were registered in the UK over the course of the first five months of 2024, representing a year-on-year increase of almost 10 per cent. We need to go beyond a simple restoration of EV grants to their previous levels and explore targeted incentives such as the introduction of a scrappage fee for high polluting petrol and diesel vehicles and bringing in free tolls for electric taxis and light commercial vehicles.”
