Electric vehicle grant rewards the rich and their consciences

EVERYONE agrees that if we are to meet our carbon reduction targets, we have to put more electric cars on the road.

After agriculture, transport is the biggest culprit for harmful emissions, and as the percentage of electricity generated from renewable sources continues to rise, EVs can significantly reduce our dependence on fossil fuels.

As things stand, electric cars account for almost 13% of sales, with a total of over 60,000 on our roads. The problem is that they remain unaffordable for a significant majority of drivers who would like to make the switch. This is brought into stark relief in the breakdown of grant relief by the Sustainable Energy Authority of Ireland, which offers subsidies of up to €5,000 per EV.

Figures released to Social Democrats TD Jennifer Whitmore show that just 1% of grants were claimed by people buying cars that cost less than €30,000. By contrast, 2,795 motorists received subsidies totalling €13.45m for cars costing over €60,000. Since July, the subsidy is no longer available for cars over that price, but it remains in place for all others. In 2021, buyers of cars costing €30-40,000 received a total of €14.9m, with a further €22.5m handed over for purchases between €40,000 and €50,000.

Defenders of the scheme argue that early adoption of technology must be subsidised and that mass market commercial viability will bring prices down. Instead, a global shortage of semiconductors, and supply chain issues related to the pandemic and to the Ukraine war, plus inflation in the price of minerals such as nickel used in the batteries, has seen prices rise.

Detractors make the valid point that anyone who can afford a car over €50,000 surely can afford the extra €5,000 themselves, especially since it does not have a huge impact on monthly repayments under the popular personal contract plans (PCPs). Also, with second-hand values soaring by up to 60%, because of a shortage of stock and the collapse of the UK imports market post-Brexit, drivers who trade in petrol and diesel cars often find themselves having to shell out very little by way of a top up for their EVs. In effect, the market has already subsidised their choice.

Crucially, though, their old cars will be sold on, and will therefore remain on the road, and those cars often are older, dirtier diesel and petrol models that do not conform to the latest EU emissions standards.

Unless the EV grant scheme is tied to scrappage of internal combustion engine cars, the net reduction in carbon emissions will continue to be negligible. Until this happens, the EV grant scheme should be seen for exactly what it is, a transfer of wealth from the poor to the well off just to salve their environmental consciences.

TIME TO BREAK INTO THE RAINY DAY FUND

IT ALREADY looks like being a bleak winter. Heating costs will skyrocket thanks to the price of electricity, oil, gas and solid fuels. Food inflation continues apace. The mortgage interest rate is rising and back-to-school costs of up to €1,500 per child will also place added pressure on family budgets.

During the banking crisis, we used the national pension fund to pay down private debt that suddenly became sovereign debt.

We must raid the piggy bank again to help struggling families. The Government has more than €10bn in a rainy day fund.

In case it hadn’t noticed, that rainy day is here.

Spend it in the Budget.