Supply issues and rising prices could slow down Irish drivers’ switch to electric cars despite increased demand for such vehicles, according to a new report.
Done Deal, an Irish online marketplace, says consumer demand for new electric vehicles (EVs) has increased by 35 per cent this year despite a rise in cost. According to the report, as of May 17th the average cost of a new EV in 2023 has risen to €64,775, an increase of 13 per cent on the figure from the same period last year.
The report says the average cost of second-hand EVs ranging from one to four years old in 2023 was €42,661, a 10 per cent increase compared with the same period a year ago. In addition, the most popular brand new car sold so far this year in Ireland was an electric model, the Volkswagen ID.4.
Despite Tesla lowering its prices, the report says that a lack of supply of EVs has strained the Irish market, leading to the increase in cost. The report also claims that a reduction in the EV grant this July will lead to an uptick in consumers purchasing electric cars before then, further testing demand.
At present, drivers can avail of a grant from the Sustainable Energy Authority Ireland (SEAI) when purchasing a battery-powered electric vehicle that meets certain criteria. The current maximum grant for purchasing an EV is €5,000. As of July 1st, that figure will be reduced to €3,500. The €2,500 grant for plug-in hybrid electric vehicles was removed in January 2022.
The report’s authors believe that the above data shows that supply limitations and “subsequent inflated prices” will be what reduces the number of Irish consumers buying EVs, rather than the reluctance of car buyers to “embrace electrification”. The report states that there is “significant demand” for EVs in Ireland.
However, the report also suggests likely long- and short-term solutions that will allow supply to better match demand in the Irish EV market. “It’s expected that as the market develops, economies of scale and improved battery technologies should improve the pricing situation, but that effect isn’t likely to be felt until the close of this decade,” the report states.
“Looking from a shorter-term perspective, there have recently been new entrants to the EV market in Ireland at various price points, which should provide more affordable options for prospective EV buyers in the months and years ahead.”