BRIAN LUCEY: Charging point incentives could ramp up electric vehicle sales

Ireland has an opportunity to position itself as a leader in an emerging technology, or perhaps a re-emerging one, writes Brian Lucey.

All it takes is political vision, a willingness to face down some entrenched local vested interests and a desire to make a change. This, of course, means it won’t happen, but we can dream.

Electric cars are not new. They predate by half a century the combustion motor, with model electric cars made in Hungary in 1828 and in Vermont in 1834. The middle and late 19th century saw an explosion of electric trams, cars, trains and so on. Even the Ford Motor Company, along with Edison, made significant investments in electric cars.

The sales of electric vehicles peaked in the run up to the Great War. Cheap petroleum, longer average trips and the lack of a comprehensive charging network subsequently made electric vehicles less and less popular. However, the tide may now be turning.

The Environmental Protection Agency estimates approximately 20% of Ireland’s total carbon dioxide emissions come from the transport sector. While clearly not all of this is attributable to private cars, moving towards electric vehicles would undoubtedly help.

Motor manufacturers and governments are also getting on board. Volvo recently became the first major motor manufacturer to announce that it will no longer develop — though not quite the same as no longer building — internal combustion vehicles. This is a signal, however, that Volvo will eventually cease production of petrol and diesel cars, as product lines run towards the conclusion.

The French government has also said it wants to see sales of internal combustion vehicles cease by 2040. In China, the Beijing authorities have said they plan to convert their entire fleet of 70,000 taxis to electric. Cities are transferring, all around the world, to electric vehicles.

Dutch bank ING recently forecast all new European passenger vehicles sold in 2035 may well be electric or hybrid. Battery technology, long seen as a rather dull and mature area, has attracted huge investments in research and development. The final piece of the puzzle is in relation to the fuel source. There is little point in transferring to electric vehicles if the electricity used to power them is not in itself low carbon.

In Ireland, more than 25% of total electricity usage comes from renewables. This trend has been increasing, will increase, and must increase.

The adoption of electric vehicles in Ireland has been slow.

In 2008, the coalition, which included the Green Party, announced ambitious plans to have one-in-10 of all Irish vehicles — some 200,000 vehicles — to run on electric. Despite this, and despite Government support, fewer than 1% of all vehicles sold are purely electric, and just a little over 1% are of the electric-petrol hybrid type.

“Range anxiety” and charge time remain concerns for many. Indeed the issue of range and charging was the main concern identified by the AA in its regular survey.

So what then should Ireland do to ensure that it gets towards the front of the pack in relation to electric vehicles? Electric vehicles already attract public subvention. The vehicle registration tax is, for the most part, waived for electric vehicles. The ESB has, on its own behalf and working with others, created a series of charging points. For quite some time, these were free to use. And electric vehicles for personal use are in the lowest band for motor taxation.

One way in which the Government could encourage more people to use electric vehicles is to remove or reduce the ‘range anxiety’. Distances from Dublin to Belfast, Cork to Dublin, Cork to Galway, Galway to Dublin, and Galway to Dublin are around 200km.

Charging points typically take your car from a local charge to a full charge in 30 to 60 minutes. Taking some time to have a cup of coffee and a break is not necessarily a bad thing. The problem at present is there are only about 70 of these fast-charging stations, and they are concentrated along the motorway network.

One way forward might be for the Government to utilise the existing excise-licensing system. A license, annually renewed, is required to sell petrol or diesel.

A simple change in the licensing conditions, along with some imaginative tax breaks, could result in the rapid rollout of a truly nationwide system of fast-charging stations. Right now, one can drive a petrol or diesel car anywhere in the country and be fairly confident if your fuel light starts to blink, you will not be too far from a fuel stop. This is absolutely not the case for electric cars.

So here’s my proposal: For every two fuel pumps, diesel or petrol, make the granting of the excise license to sell this fuel contingent on the installation of one fast-charging station for electric vehicles. As a sweetener, exempt the installation and purchase of these chargers from Vat, make it clear this will last for three to five years.

A judicious mix of carrot and stick could see the rollout of a dense infrastructure of electric vehicle charging points in Ireland by the end of this decade.

Brian Lucey is professor of finance at the School of Business, Trinity College Dublin


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