Podcast Ep 138: Ireland’s Government will need to think creatively to encourage more electric vehicle ownership says Stephen Healy, head of Motor Sector at Bank of Ireland.
The Irish Government has set a steep electric vehicle target for itself: 180,000 electric vehicles (EVs) on our roads by 2025 and 936,000 by 2030. This ties in with Ireland’s aim to reduce greenhouse gas emissions by 51% by 2030 and reach net-zero no later than 2050.
This is robust stuff, but can it all be achieved? No doubt there are many people who would love to buy an electric vehicle but prices for brand new models are less attractive than petrol or diesel vehicles.
“This will create a greater volume of used EVs, beneficial for those who cannot afford a brand-new electric car”
In his recent Motor Sector News report for September, Healy noted that Government can play a decisive role by adding electric vehicles to its own fleets and turning them quickly back into the used car market.
Speaking on The ThinkBusiness Podcast, Healy qualified his thoughts. “The sector feels Government has a strong part to play here. Grants have been supportive in getting annual sales to around 14% of new car sales, but EVs still account for less than 3% of the entire fleet on our roads.
“Government will need to actively replace fleets with EVs and turn them quickly back into the market. This will create a greater volume of used EVs, beneficial for those who cannot afford a brand-new electric car.”
Revving up demand
Looking back on how the car market performed in September, Healy reported that in the month of September new passenger car (PC) sales in Ireland increased 42.5% year-on-year (y-o-y) to 6,340 units, Light Commercial Vehicle (LCV) sales increased 6.5% y-o-y to 1,756 units and used imports declined 12.5% y-o-y to 4,334 units.
Speaking on The ThinkBusiness Podcast he said that pent-up demand for cars since Covid carried over into 2022 but supply shortages have dented the true market potential.
“Monthly sales fluctuated up and down this year as fresh supply arrived. July is the traditional secondnd peak month for the market but new car sales fell, but then rose by 36% in August and 43% year-on-year in September. The same story played out across the European Union, with sales up 4% in August and 10% in September.
“New car sales in Ireland increased by about 1% in the first nine months. We should see an improvement in supply next year and the early Budget this year brought certainty to the sector regarding taxation.”
Asked if Budget 2023 was a good one for the motor industry, Healy said it could have been worse. “There was a strong lobbying effort by the sector to defend itself following two successive Budgets where vehicle registration tax (VRT) increased twice, meaning higher process for consumers. VRT was left unchanged after Budget 2023, mainly because this would only feed into an already hot inflationary environment.
“The good news is that the grant for battery electric vehicles (BEVs) will continue in H1 but will taper in H2 2023. The sector is awaiting clarification on this point from Government.”
Looking to how the rest of the year is shaping up for the motor trade, Healy said the sector is ramping up for 2023. “Q4 only represents about 2% of annual sales, so dealers focus now on selling used cars and workshop operations.
“The sector expects a market with new vehicle volumes at least on a par with 2022 levels.
“Supply constraints will continue into 2023, certainly in H1, and ease gradually into 2024.
“Bank of Ireland supports 15 franchises in Ireland accounting for almost 50% of market by franchise market share. Franchises are pointing toward a cautiously optimistic yet realistic outlook.
“If you’re in the market, now is the time to talk to your dealer about a new car to make sure you get it in Q1,” Healy advised.