The Irish car trade has reacted with anger and confusion at the Government's sudden decision to remove grant incentives from plug-in hybrid models.
No grace period
The move, which was not announced in last week's Budget, sees the €2,500 purchase grant removed from plug-in hybrid electric vehicles (PHEVs) with no grace period given to buyers who may have ordered such a car for January. When the grant was previously reduced - from a maximum €5,000 to a maximum €2,500, in July - buyers were given a four-month grace period from the point at which they had ordered the car.
This time around, there's no grace period, and so the car trade and car buyers in Ireland find themselves once again thrown into turmoil with little-to-no consultation nor warning.
Director General of the Society of the Irish Motor Industry (SIMI) Brian Cooke said: "This is a terrible decision, which is anti-consumer and anti-environment, only adding to the cost for the customer making a better environmental decision. PHEVs are an important stepping stone to going fully electric, particularly in parts of rural Ireland where this is a lack of charging infrastructure. For the first quarter of next year PHEVs have been ordered well in advance of the Budget. The Government's Climate Action Plan hopes to have 94,000 PHEVs on our roads by 2025 and 290,000 by 2030. The removal of these incentives undermines this plan and runs counter to the aim of reducing emissions. While we accept supports cannot be in place forever, it is way too early to remove this grant. It is particularly unfair to consumers and the Industry who have ordered cars for 2022 in expectation of this support continuing."
Completely destabilises the industry
He continued: "It is essential that the existing basket of Electric Vehicle (EV) and Plug-In Hybrid Electric Vehicle (PHEV) incentives be maintained, until we see the dial moving towards mass adoption over the next ten years. With major delays in the supply of new vehicles, it will be impossible to get these vehicles into the country before December and in any event most customers have ordered in anticipation of a new 2022 car. The lack of understanding of both the motor vehicle supply chain and customer behaviour in ordering vehicles for the start of the following year will lead to huge financial and logistical problems for manufacturers, retailers and customers, as we emerge from a year that completely destabilised the Industry with COVID and BREXIT. We are calling on the Government to be fair to customers who are buying a new PHEV next year. The Minister should continue to support the purchase of Plug-in Hybrid Electric Vehicles (PHEV) in 2022. If we are to successfully decarbonise the national fleet, then the Government and the Industry must work together. We will be supplying the vehicles that are needed to meet the Governments ambitious targets but this decision does nothing to further that objective."
Premature and sends the wrong signals
The Government is coming under fire not just from the industry, but also from consumer groups. The AA has said that the decision is: "premature and sends the wrong signals."
"While we are very much welcome yesterday's official announcement of the extension of the supports for electric vehicles (EVs) we feel that the announcement of the cessation of PHEV grants in January, which will be just six months after they were halved from €5,000 to €2,500 is premature and will not encourage the move away from petrol or diesel cars," said AA Ireland Head of Communications, Paddy Comyn. "PHEVs are a stepping stone for many people away from petrol and diesel cars and for some people, a battery electric vehicle doesn't quite yet meet their needs and a PHEV would have given many motorists the natural progression to move into a BEV. We acknowledge that the grant money will be used to increase the penetration of electric vehicles, but AA Ireland feels that this should have been at least extended to the end of June 2022, to allow motorists who were undecided to order a new car for next year and still take into account any delays due to the global shortage of semiconductors. Irish motorists remain very uncertain of the technology and many of our members are unsure of what to do next. They should be given more time to adjust to the new technology and for the technology to become more affordable before making drastic changes to grants. In the case of some popular family crossover vehicles, the price of diesel versions will once again become more attractive which will be counter-productive to our shared climate goals."
Eamon Ryan, the Minister for Transport, has defended the decision and points out that PHEVs are still being given incentives, including lower road tolls and a continuation of the grants for home charging points. "It is important that we continue to support consumers in making the switch to electric vehicles, and I am pleased to confirm a significant increase in supports for fully Electric Vehicles in 2022, and the supporting recharging infrastructure" said Minister Ryan. "The arrival of long range, fully electric, vehicles on the market means that range anxiety can become a thing of the past. A single charge on one of these will cover well over 400km range. While Plug-in Hybrids, provided a part-electric solution for motorists who took longer journeys or were concerned about EV range, they were a compromise in terms of both emissions and air quality. Now that range anxiety has been addressed by manufacturers, we will focus our exchequer resources on fully electric vehicles. We have an ambitious goal to have almost one-million electric vehicles in the fleet by 2030, and we are on our way to meeting this target. Already in 2021 we have seen a high purchase level of EVs in the Irish Car market in 2021, with EVs now accounting for 15 per cent of all new car purchases in Ireland this year. However, we still have a long way to go and we need to ensure that we have the right supports in place to get there."