Oireachtas Joint and Select Committees

Tuesday, 26 September 2023

Joint Oireachtas Committee on Climate Action

Impact on Carbon Budgets of Trend Towards Heavier and Larger Vehicles: Discussion

Mr. James Nix:

I think thousands of people have had exactly the same experience as the Deputy and his wife. They do not go to buy a SUV and the dealer is invariably nudging them towards one. That in turn comes from the car makers themselves, because their output is planned in advance. More than 50% of vehicles they are making across all powertrain types are SUVs. They therefore nudge their dealers accordingly.

In terms of the impact of advertising, we know that exposure to SUV ads leads to a 70% increase in likelihood to buy. That is based on large-scale surveys in the UK. Margin plays a huge part. SUV margins are 40% to 60% higher. I think there was a realisation that with action on climate change, there would probably be an overall decrease in the number of vehicle sales. Car makers, therefore, have prioritised the higher margin vehicles seeking to more than make up that trend. There is also financialisation. As everybody knows, you rarely buy a full car anymore. You buy a percentage of that car, if you like, and then in three to five years time you sell on that percentage. Financialisation obviously changes the fiscal dynamics of purchase in the first place.

I take the point made on medical needs. That is something that definitely could be exempted, for example, in a weight tax. On foot of a medical certificate, the weight tax is disapplied from that registration. I will leave it at that.