Have Electric Vehicles Lost Their Spark?

Electric Vehicles are on the slow in Ireland and abroad – here’s why.

New figures show that electric vehicles (EVs) are falling out of favour with Irish consumers, as a 15.5% plunge in sales is felt in February and a 41% plunge in March. These figures corroborate internationally; according to Fortune, the number of cars Tesla sold in the first quarter missed Wall Street’s expectations by ‘such a wide margin that it’s worth wondering how much of the electric vehicle giant’s demand problem is baked into the lofty expectations for its revenue and earnings growth over the next few years.’

Fresh calls for the Government to intervene to make them more affordable kickstarted in early April, given that there is now serious concern about how the transition to electric vehicles has stalled over the first quarter of 2024 – traditionally the biggest buying period of the year. Just over 2,000 new battery electric vehicles (BEVs) were registered in March, down from 3,412 in the same period last year.

A ‘price war’ could benefit potential buyers, as the cost of a new EV would cost far less. However, this would also impact current owners, since a lower purchase price for new vehicles would likewise reduce the value of second hand models –and that sort of downgrade in value can hit confidence in buying another electric vehicle. Indeed, a lot of recent anti-EVs journalism exists at present, with numerous articles written by early adopters who have become tired of their electric cars and gone back to diesel, populating car pages.

According to the Society of the Irish Motor Industry (SIMI), petrol cars continue to lead the new car market with a 32.97% share. Diesel is next at 23.76%, then hybrids (petrol-electric) account for 21.5%; electric is at 12.46%, while plug-in electric hybrids have a 7.76% market share. At the time of writing, the top five most popular new car models are: 1. Hyundai Tuscon, 2. Kia Sportage, 3. Skoda Octavia, 4. Toyota Rav4, 5. Toyota Yaris Cross. The biggest-selling car in March in Ireland was the Skoda Octavia, while the Tesla Model 3 was the top EV.

After the arrival of the Tesla Model 3 in 2017, fellow car brands were convinced to jump into electrification, such as Jaguar with the I-Pace, Audi with the e-tron, and Porsche with the Taycan. Newer brands including Lucid and Rivian also arrived on the scene and EVs became the new, big thing. During the pandemic, the ever-increasing sales of EVs made it look like the format was going to take over fast. But with the cost-of-living crisis roaring steadily since lockdowns lessened, not to mention the global push towards public transport by way of global warming, the purchase of new cars lays low on the average person’s agenda. As per Fortune, Tesla sold about 387,000 cars in Q1, some 62,000 less than analysts estimated. Obviously, profit estimates for the quarter will now have to be cut, after already dropping by more than half in a year. It also puts the company on track for a second straight year of declining annual earnings. That said, shares remain costly. At 59 times forward earnings, Tesla is the most expensive member of the Magnificent 7 group of big tech companies; high-flier Nvidia Corp. trades at a multiple of around 36, and Amazon.com Inc. is at 45. Yet, Tesla has the lowest growth estimates of the three for this year – and its stock is the biggest decliner in the Bloomberg Magnificent 7 Price Return Index in 2024.

However, Musk seems insistent on progression. Just last week, the Tesla CEO announced that the brand’s self-driving vehicle, aptly named Robotaxi, will be unveiled on August 8. His post was simple and included no details. “Tesla Robotaxi unveil on 8/8,” the Tesla CEO (and owner of X) posted. The details he has alluded to in the past in terms of Robotaxi are that Tesla will make a car without controls for a human to use and that it will be equipped with Full Self-Driving Capability. This means that through software updates, the car will gradually become better and better at driving, and at some point, the cars will be capable of operating as fully autonomous taxis and could earn money for their owners by giving taxi rides on their own.

Could this be just the ticket to employ intrigue in EV buffs and boost sales? Well, given the recent press about self-driving cars, perhaps not quite yet. Waymo, a subsidiary of Google’s parent company Alphabet, is also working on autonomous ride-sharing services, not dissimilar to Musk’s Tesla. However, work halted in mid-February when the company had to recall its own cars after two of its cars hit the same tow truck within minutes of one another.

As per Forbes, though, all is not lost… only premature. ‘People are seeing the realities now, and we’re not so excited about electrification anymore that we’ll pay such a major premium to have the technology,’ writer and electric vehicle expert James Morris writes. ‘But while price parity has been delayed, it’s coming (probably from China), and then EVs will be cheaper than internal combustion vehicles. After that, the cheaper running costs – both in terms of charging and less need for maintenance – will mean EVs will rise again, as we see them with more clarity. In the dominant EV markets of Europe and China, electric cars are still likely to be the majority vehicle purchase type by the end of the decade.’

For those interested, an EV comes with a myriad of benefits, including Benefit in Kind (BIK) on all company cars that is determined by the car’s OMV, the annual business kilometres driven and the CO2 emissions-based bands. Government support exists, too; up to €3,500 can be claimed towards the purchase of a new BEV, with up to €300 available to install a home charger unit.

Want to find out more?

For more information on how electric vehicle grants make it more affordable to switch to an EV, check out the Sustainable Energy Authority of Ireland (SEAI) website here.

We at Fitzgerald Power have spent thirty years offering creative solutions to a diverse range of clients across Ireland, the UK and Europe, and we’re pretty proud of what we’ve helped our clients to achieve. We enable and empower businesses to reach any and every goal. Whatever the job, we don’t offer anything less than the best. We work across a range of sectors, including pharmacy and SME. Please get in touch today if you would like to speak to any of our experts.

Further Articles

Benefit-In-Kind on Electric Cars

Electric cars have come to play a central role in the Irish Government’s Climate Action Plan. How do I know what vehicles are eligible for a grant? Fitzgerald Power explains.

Read Blog

Budget Report 2024

We’ve condensed all you need to know about Michael McGrath’s Budget 2024 into our Fitzgerald Power overview. Read and Download our review here.

Read Blog