Ireland needs to put the pedal to the metal to speed up the transition to electric vehicles.
More work needs to be done in terms of incentives and infrastructure to make consumers and businesses feel confident about investing in electric vehicles.
That’s the view of leading players in the Irish electric vehicle (EV) space who were speaking with ThinkBusiness ahead of a key business event ‘Road to Electric’ taking place at the K Club in Kildare on 19 October.
“It is important that the Government looks at plans to contribute to the pre-owned electric vehicle market and electric commercial market also so that customers are informed and supported in those spaces”
Bank of Ireland Finance has partnered with Nevo, Ireland’s first dedicated car platform, to showcase the latest vehicles and trends as well as speakers covering topics such as switching to electric and more. To attend in person, click here
In the Irish Government’s Budget 2024 it emerged that benefit in kind (BIK) on company cars will be extended for a further year the temporary universal relief of €10,000 to the Original Market Value.
Together with the extension of the universal Original Market Value relief of €10,000, this measure will mean that an employee with an electric company vehicle will see an overall BIK Original Market Value relief of €45,000 in 2024.
In the Budget it emerged that VRT relief for battery electric vehicles is to be extended for a further two years to the end of 2025. This relief applies to battery electric vehicles with a value of up to €50,000.
ThinkBusiness spoke to Derek McDermott, managing director of Bank of Ireland Finance on what these measures mean for the progression of electric vehicles in Ireland and motoring in general.
“The measures announced in the budget are positive especially the extension of the current VRT and BIK (Benefit in Kind) reliefs for electric vehicles which should encourage more drivers to make the switch to electric either in their own personal capacity or as company car drivers,” said McDermott. “These EV reliefs give consumers some clarity and confidence when there has been a lot of uncertainty in the motor industry recently.
“I think there may have been missed opportunities around plans for EV infrastructure which is definitely the piece of the jigsaw missing to give customers that confidence to drive electric. It is important that the Government looks at plans to contribute to the pre-owned electric vehicle market and electric commercial market also so that customers are informed and supported in those spaces.”
McDermott makes an interesting point when it comes to electric commercial. Ireland is lagging behind in terms of EV adoption by the business community. In 2023 to date for example, sales of electric light commercial vehicles only accounted for 2.76% year-to-date, with petrol and diesel vehicles accounting for a mammoth 97% of sales in 2023 so far, according to SIMI data.
Derek Reilly from Nevo agrees with McDermott that there have been missed opportunities when it comes to Budget 2024 and the acceleration of electric vehicle take-up.
“I feel there are missed opportunities in areas like a longer period of BIK certainty if we are serious about transitioning the business fleet to EV. The EV tapering mechanism is clunky and the Original Market Value deduction of €10,000 helps but again confusing for those looking at a 36-month or 48-month finance or lease package. I would also have liked to see support for those looking to go for a pre-owned/used EV like we see in other countries.
Reilly noted that for similar reasons the growth in commercial electric vehicles remains low. “This is a combination of lower ranges in commercial EVs making selecting an electric vehicle that is business viable difficult for some. Add to this lower stock availability to our neighbouring right-hand drive market where there are a lot more customers willing to make the jump. We find a number of fleet managers come to us looking for advice on best practices from other fleets who have made the transition and other leading markets. The Government really needs to do more to help commercial vehicle operators bridge the gap in the green premium price difference between comparable EV and ICE (Internal Combustion Engine) models.”
McDermott added: “This market is small to date and that is due to lower kilometre ranges in electric commercials and higher prices than the petrol/ diesel equivalent. You can see why that would make it difficult for some businesses especially a one person operation to make the economics of transitioning to EV work.”
Room to vroom on infrastructure
On the question of infrastructure, McDermott noted that infrastructure is slowly improving but it is not at the level that it should be. “This is evident when you compare Ireland to other countries where you see more hubs and large numbers of charging points at each location.
“Customers are definitely watching this space to make sure when they make the move to an EV that they are confident that they can charge their vehicle outside the home. It is important that additional funding is made available for Zero Emission Vehicles Ireland (ZEVI) to maintain the current levels of EV supports and to invest in the national charging infrastructure.”
Reilly agrees that ZEVI is doing great work in this space, but the bottleneck seems to be the grid and increasing capacity for those who want to build these hubs. “Range anxiety is no longer a thing as the battery sizes in most modern EVs will get us around our small island, people are definitely more range aware but wondering if a charger will be free when they arrive is what people are thinking about for their longer journeys. I’m confident we’ll get there.”
One of the stated aims of the Irish Government has been to get to 1m EVs on Irish roads by 2030.
Both McDermott and Reilly believe supports will be key if Ireland wishes to achieve such a goal.
“We have made good progress but we have a long way to go to meet the challenging targets in the Government’s Climate Action Plan,” McDermott noted. “In this context it is essential that supports are in place for both consumers and businesses by extending EV incentives. This will help maintain a greater supply of electric vehicles for the Irish market, increase new EV sales in the short term and create an active used EV market, which will make an electric vehicle affordable to a wider constituency of motorists.”
Reilly is optimistic but believes there is room for ambition. “Are we getting there? Yes, we are making great headway and I know that the 1 million target was very aspirational. The Government has since changed to a percentage of market share which seems to be happening as drivers see the benefits of going electric. As petrol and diesel prices threaten to rise again, the ability to charge at home on a tariff you choose and the possibility to charge from solar are just some of the ways people are able to manage their travel expenses.”
Main image at top: Derek McDermott, Managing Director, Bank of Ireland Finane; Karen Kennedy, Franchise Retention and Innovation, Bank of Ireland Finance; Derek Kavanagh, Head of Motor Franchise Sales, Bank of Ireland Finance; Simon Andreucetti, Head of Growth, Nevo; Liam Grimes, Head of Operations, Nevo; Derek Reilly, General Manager, Nevo; and Fionn McGarvey, Group Marketing Lead, Nevo