Bright future, but challenges remain

While electric vehicle (EV) sales in Ireland are rising, the market is still heavily dominated by combustion engines. It is a trend that is seen worldwide, where EVs constitute less than 5 per cent of passenger car sales in the vast majority of markets. But as the new technology continues to develop in tandem with infrastructure and incentives to support it, the prospect of an electrically charged future for road users becomes more realistic.

KPMG’s annual Global Automotive Executive Survey looks at data and opinions from about 1000 automotive executives from around to world to report on growth and change within the sector. The results of the survey this year show that from an industry perspective, there is a clear focus on investment in fully electric and hybrid car technology, with manufacturers planning to continue to push development of EVs to the forefront over the coming decade.

However the survey also looks at several thousand consumers, who remain more conservative, preferring hybrid or traditional combustion technology ahead of fully electric vehicles.

"Figures released by Simi (the Society of the Irish Motor Industry) show a dramatic increase in the number of new electric car registrations in Ireland," says Michele Connolly, partner and head of corporate finance with KPMG Ireland. "While this is some way off those leading the charge in other European countries – in Norway for example – it is encouraging to see such positive indicators that EVs look set to become a more common sight on our roads."

KPMG’s report suggests the biggest challenges in embracing electric vehicles for the customer currently are the cost and the charging experience, finding that negative charging experiences made customers wary and sceptical about moving to fully electric technology. A range infrastructure upgrades and purchase incentives may be needed in order to counteract the reluctance to move away from traditional combustion engines.

Last year, a 0 per cent benefit in kind rate for EVs was announced by Minister for Finance Paschal Donohoe as part of the Budget 2019. This means that no taxable benefit arises for an employee when they are provided with an EV by their employer, once the vehicle comes costs under the limit of €50,000. The ESB is also set to continue upgrades and expansions of its standard charging and fast-charging networks.

“The signs are there that EVs are already becoming more mainstream in Ireland with sales of EVs to date in 2019 already exceeding total EV sales for all of 2018,” says Niall Hogan, head of eMobility at ESB. “The increasing choice of new EV models is encouraging and this choice is likely to expand further as car manufacturers increase their EV production.”

Battery technology

An Post recently announced a shift to a fleet of new electric vehicles in Dublin, with plans to expand their EV use into other major cities over the next three years. With increased infrastructure and battery technology, and new EV van models being announced, the near future will almost certainly see the adoption of EVs for more commercial purposes, including public transport.

“Electric vehicles in public transport is increasing significantly, most obviously in China,” says Hogan.

"Bloomberg New Energy Finance is expecting there to be 1.2 million electric buses globally by 2025. Cities such as Amsterdam plan to have all their public buses electric by 2025. The Irish Government has stated their ambitions to move in this direction also. We believe that electric buses can bring huge costs benefits to bus operators, improve air quality and noise pollution in urban areas," he says.

“The National Development Plan states that by 2030 the Government aims to have at least 500,000 electric vehicles, which would be around a quarter of all cars on our roads,” says Hogan.

“The plan also reiterates the Irish Government’s stated goal that no non-zero emission vehicles will be sold in Ireland after 2030, and that no NCT certs will be issued for non-zero emission vehicles after 2045. The electrification of transport is a key element of ESB’s Brighter Future Strategy. Our vision, which is consistent with Government targets and international trends, is to see hundreds of thousands of electric vehicles on Irish roads over the next decade.”

While the road towards EV adoption over the coming decades seems set, that is only part of the picture, suggests Connolly.

“Electric vehicles are widely viewed as a precursor for autonomous vehicles, which is a vital consideration from an infrastructure planning perspective. Planning for an EV future only would be very short-sighted. Policymakers also need to consider autonomous electric vehicles in the context of national and local transport strategies and spatial development plans. Planning and anticipating both an electric and self-driving future today will ensure we are not behind the curve,” she says.

“It is important to recognise that the shift taking place is not just about transport, but also how we as citizens in our communities will live and work in the future. Widespread adoption of electric vehicles will have a significant impact on the economy and on society as a whole, and will create new challenges and opportunities for the future. We need to expand our thinking as widely as possible about what both an electric and autonomous-vehicle future means for us in order to maximise the economic, environmental and road safety benefits.”