Mr. Brian Cooke:

I thank the Cathaoirleach for the invitation to address the committee.

If Ireland is to achieve its ambitious environmental goals, the drive to decarbonise the national vehicle fleet by electrification must be a fundamental pillar. In fact, it is projected to deliver the greatest emission reductions across the Government’s climate action plan. It is also the key strategic issue for the motor industry both nationally and globally. The motor industry is already making significant efforts to do its part and is fully committed to the electric vehicle, EV, project going forward. Manufacturers are investing heavily in new electric vehicles. There are now over 120 EV models for sale in Ireland, including a growing number priced under €30,000. Irish motor retailers are also investing heavily in premises, equipment and employee training in preparation for the increase of EVs on roads. The industry can and will deliver EVs in large numbers. The extent of this delivery though is not just in the hands of the Industry. The State also must play an important role in encouraging drivers to switch to electric. The reality is that for the majority of motorists, the single biggest contribution they can make to help Ireland achieve its climate targets is to switch to an EV. The industry and the State must work together to make this possible.

The joint committee is looking at the key barriers in preventing Ireland from meeting its climate targets and has asked us to highlight the challenges and potential solutions to ensure sustainable progress. First, some good news. Following the decline in EV registrations in 2024, we have seen a recovery this year and EV sales have returned and exceeded 2023 levels. We have achieved the 2025 EV passenger car target of 175,000, as outlined in the Government’s climate action plan. There are now over 185,500 EV cars on the road. Of these, nearly 98,000 are fully electric. This is an important achievement.

The challenge from 2026 to 2030 is an even greater one. Motorists who have already gone electric are the innovators and early adopters. We must now target a new cohort of more cautious consumers and businesses who typically adopt new technology only after it has proved successful. This group may also be swayed by misconceptions about range, charging and battery performance. We must combat misinformation whenever and wherever possible. The Climate Action Advisory Council has highlighted that mass market adoption is achieved when the total electric vehicle stock reaches 16% of the national fleet. Currently, we are at 4%, meaning that a fourfold increase is required to reach mass market adoption. Only then will there be a fully functioning EV new and used car market.

One of the biggest barriers to reaching Ireland’s climate targets is the weakness of the new car market. To sell EVs in the volumes required, we need a stronger demand for new cars. However, registrations remain well below pre-2008 levels. The 2030 target - ambitious from the outset - is simply not realistic given the size of the market. The Environmental Protection Agency, EPA, estimates that with no additional measures and based on current new car market volumes, we will have 564,000 electric vehicles on the road by 2030. This number increases to just over 640,000 with additional measures, which, although short of the target, would still be a significant achievement from what effectively was a standing start at the beginning of the decade.

The spectre of significant fines for missing the climate targets hangs over the country, with an estimated range in 2030 between €8 billion and €27 billion. In order to reduce these fines, we must invest now in all climate positive projects, including electric vehicles. We must continue to incentivise. It has worked to date and reductions in support will only undermine the EV project. Incentives are vital to bridge the affordability gap for consumers and businesses to choose an electric vehicle, ensuring that new EVs remain a viable option. The cost of any incentives between now and 2030 will be offset by the reduction in fines. It should be emphasised that fines are dead money going to the benefit of other economies. EV incentives on the other hand will help generate additional domestic taxes, protect local employment as well as delivering significant environmental benefits. We were not aware of the contents of the budget on preparing this statement. What we need to see, as a minimum, is the extension of the current incentives, including the SEAI purchase and home charger grants, VRT relief, benefit-in-kind relief and a 9% VAT rate on electricity.

Looking at other European countries, many offer stronger supports for businesses to adopt EVs, such as VAT relief and enhanced tax deductions. Similar measures in Ireland would help SMEs that cannot access the SEAI grant. France has also introduced a social leasing scheme for lower income households, which could be considered here to broaden access.

The transition to zero-emission vehicles should be accessible to everyone. The reality is that for people driving older vehicles the financial gap that must be breached in moving to a new EV is just too large, and we do not have a fully functioning second-hand EV market. Next year is not only a crucial year for new EV registrations but also for the development of the used EV market. Used car buyers make up the majority of the Irish car market. Over 20,000 EVs sold in 2023 will become three years old next year. Many of these, in particular company cars or cars financed by PCP, will be coming to the used car market next year. Any support for used EVs, which could be based on a household income threshold, could potentially bring a wider constituency to the EV market. In addition to vehicle supports, the charging infrastructure must continue to evolve. The charging infrastructure should operate with simple contactless payments already used in everyday life instead of the plethora of apps we have at the moment.

Overall, we have hit the EV target for 2025. We are on the right road, but we need to accelerate. Ireland has many advantages in relation to the roll-out of EVs. We are small country geographically meaning range anxiety is not as big an issue in Ireland. We have a temperate climate, which is the ideal environment for battery performance and longevity. Our residential property profile lends itself to home charging. While the 2030 targets may be out of reach, SIMI still feels that electric vehicles have been a good news story to date, and with the right Government support can continue to progress. Incentives will be required to drive behavioural change.