Mr. Brian Cooke:

Good afternoon Chairman, and thank you for the invitation to speak with the committee today.

The project to electrify the national vehicle fleet is a pillar in the climate action plan. It is also the fundamental strategic issue for the motor industry. There is a huge appetite across our industry to deliver on this project. We have already seen massive investments in new vehicles at vehicle manufacturer level. Local retailers are also investing heavily in premises, equipment and employee training in preparation for the rapid increase of electric vehicles, EVs, on Irish roads. The industry can, and will deliver EVs in large numbers, but the extent of this delivery is not just in the hands of the industry and it needs the State’s continued assistance to help build the conditions that will allow motorists confidently move to an EV at the earliest possible stage. In addition, the continued roll-out of a national charging infrastructure is crucial, particularly in rural parts of Ireland where charging is not commercially viable.

The committee has identified the used EV market as being of critical importance and this is something we in Society of Motor Industry Ireland, SIMI agree with. Motorists typically buy used cars chiefly down to affordability reasons. However, the new and used car markets are inextricably linked. Currently, we clearly do not have an adequate supply of EVs in the national fleet to create a viable used EV market. This will change but the question is how quickly this can happen. A strong used EV market will be key to reaching the ambitious targets in the climate action plan, and also provides the opportunity to replace the oldest highest emitting cars on the road.

In Ireland the used car market is typically created in two ways, by new cars being registered in Ireland becoming used car stock once the original owner has moved it on and by the used import market which can plug the gap when there is a shortage of used cars. The used import dynamic, however, has changed. Brexit and the resulting tax changes on UK imports, along with the shortage of used cars in the UK, means this market is not as attractive as it had been in recent years.

Over the coming years, EVs on Irish roads will overwhelmingly be those first registered new in Ireland and a vibrant used EV market will only evolve on the back of a strong Irish new car market.

The Irish new and used car markets have underperformed since 2008 due to a number of factors, including the recession, Brexit, the pandemic and high local taxation levels. The benefits of supporting a stronger new car market can help us get much closer to the climate action targets, while at the same time replace the oldest high-emitting cars on Irish roads with electric vehicles or lower-emitting cars. In this regard, we need the State to continue its investment in supporting electric vehicles. The industry accepts that supports cannot last forever and appreciates that the State has been generous to date. However, we have seen a gradual erosion in recent years of these supports and we believe it is too early in the EV project to start this withdrawal. It is vital that the Sustainable Energy Authority of Ireland, SEAI, grant, vehicle registration tax, VRT, relief and other supports currently available are maintained out to 2025, at which time they can be reviewed. By doing this, we can provide consumers with confidence in the EV project and create an active used EV market at the earliest possible stage, thus widening the potential constituency of EV buyers. In addition, Ireland is also competing with other EU countries for the supply of new EVs, and to ensure it can optimise its share of this supply, incentives must remain.

In order to boost used EV availability, a particular focus should be made on the business fleet and company car sector. The nature of this market means that the cars are typically released to the used car market when they are two to four years old. Two key measures can encourage the business fleet: first, extend the current 0% benefit in kind, BIK, ceiling out to 2025, and second, the reinstatement of the SEAI company car grant for a period of time. The extension of the home charging grant for second-hand buyers is also crucial. In addition, with the Government commitment to electrifying its own fleets, a requirement that these EVs be traded every two years could also increase supply to the used car market.

In order to drive down emissions, we must eliminate the worst polluters from the national fleet. In the past, targeted scrappage schemes have assisted in this regard and could be considered and limited to EVs. It also has to be highlighted, however, that many of those driving older cars do not have the financial capacity to trade up to a new or used EV, with the likely cost of trying to change to an EV from an old petrol or diesel car being unachievable for many consumers. Their EV journey will take significantly longer and in the meantime, they will be trapped and subject to increasing fuel prices, as well as increased carbon and potentially other taxes, from which they do not have the potential to escape. These car owners, some of whom do not have other transport alternatives, will need to be supported. The retention of some equity value in their current car will be important to allow them to trade up to a more fuel-efficient car, thus reducing their running costs and reducing their emissions.

The industry and the State need to work together to help consumers make the transition to EVs a successful one. Over the period ahead, we want to engage consistently and regularly. We last presented to this committee four years ago and much has changed in the meantime. SIMI will issue our own more detailed report on how to reduce transport emissions early in the new year and I will forward a copy to the Chairman and members. SIMI would welcome the opportunity to meet this committee and other State agencies to discuss this research in detail.

The industry is committed to driving down emissions and will continue to provide solutions for motorists. EVs are set to become commonplace on Irish roads. SIMI members will sell and service hundreds of thousands of EVs by the end of the decade. However, it will be the economic, business, taxation and retail environment that will determine how close we can get to the climate action plan targets.