We need to talk about Electric Vehicles

There suddenly seems to be some hysteria about the electric vehicle future, but is it justified?

The first electric vehicle I ever drove was 15 years ago - the G-Wiz, a tiny, ridiculous, two-seater that was gathering some momentum in London at the time as a way to get around London’s traffic and their congestion charges. As a journalist, writing for The Irish Times , I was tasked with seeing if this was something that got much reaction on the streets of Dublin. Yes, was the answer, but not perhaps in the way the manufacturer intended. Laughs, sniggers and confusion were the primary reactions.

Thankfully the pathetic range meant that I didn’t have to suffer the humiliation too long. Fast forward to April 2010 and the Mitsubishi iMiev landed, cautiously, on our shores. Costing around €38,000 (the same price as a BMW 320i SE that year), it was mostly used as a PR show pony for both the brand and the ESB, who at the time acquired a fleet of them. Driving this a little further, attempting to go from Dublin to Drogheda (how daring), was deemed pretty adventurous at the time. It wasn’t until Nissan democratised the electric vehicle with the Leaf, at the time a massive electric leap forward, that we could really start to think of the electric car as likely to become part of the motoring lexicon.

Cars like the Renault Fluence (or effluence as a colleague called it) faired less successfully, but we must remember that in 2011 the Nissan Leaf was European and World Car of the Year. Nissan in Ireland looked all set to sell them by the boat load and the fledgling ESB eCars at the time was talking up some serious numbers. We had been through a change in the taxation system in 2008 which, naively, pushed us all to diesel cars, because they produced less CO2, so petrol cars were suddenly the pariah. So a switch to these new, CO2 free (at least at the tailpipe) cars seemed like a sensible approach. But then the world economy, especially Ireland’s, went into meltdown. The last thing anyone cared about was spending substantial money on an unproven technology. Well, because we were all broke.

So the EVs bar mitzvah was put on hold, for a time at least. Sales were slow, despite generous grants, because – let’s face it, the first cars were pretty limited and in some cases, pretty awful. I worked for Volkswagen at this point and we launched the eGolf in earnest, with the first generation (24.2 kWh battery) barely able to manage 130km on a full charge. The second one (35.8 kWh battery) was better, with more battery capacity, but even then, 200km was cause for celebration.

Fast forward to 2024 and for anyone who may have slipped into a coma back in 2014, a lot has happened in the past ten years in the automotive world. Volkswagen almost single handedly made diesel a bad word by attaching a gate to it, and Elon Musk got both a hair transplant and the impetus to turn the world of EVs and indeed, how we buy cars, on its head. We also had a global pandemic which meant many of the chips meant to produce cars went to laptops, so we could all work from home.

So why are we in such a strange place with EVs in 2024? Governments across Europe have told us that we have to give up our petrol and diesel cars (unless they have some sort of battery attached) in the not-too-distant future and the numbers don’t lie. On the back of a beermat maths would indicate that driving a Tesla Model 3 compared to a Volkswagen Golf Diesel will save around 1,258kg of CO2 annually (if we assume 0.4kg of CO2 per kWh generated – yes if you use solar etc, its less, if you get your electricity via coal from Poland, more, but let’s keep things polite).

The first people to buy EVs, the early adopters, or ev-angelists didn’t care about the drawbacks as much as they cared about the planet. They put up with the rubbish range, awkward, non-existent charging facilities and finger-in-the-air residual values because they didn’t want to drive anything with dirty stuff coming out of the tailpipe. Simple really. They would put up with anything, and usually had to. Stage two was the ones who could afford to dip their toe in this new tech. What better way to offset your carbon footprint, than to buy a Tesla Model S, hoover up the generous grant and then wait until cover of darkness to take the V8 Range Rover to Donnybrook Fair for some avocados flown from Mexico. Stage three gets a little murkier. And that is where we are now, in my view. We are now moving towards the “others” category and that is where it becomes more challenging. Generous grants, the rising price of petrol and diesel over the last couple of years and a sudden increase in the variety of models coming on stream meant that “regular” folk have started to buy EVs and that is where it becomes more complicated.

?When I say “regular” – we of course say those people who by-and-large could afford a new car and who had or could have access to credit for a car costing often north of €50,000. Shortages of supply initially meant that some buyers were buying regular EV SUVs that were north of €70,000. There was a long waiting list for cars like the Skoda Enyaq, which was changing hands at a premium at one point and all was reasonably fine. The issue with Stage 3 is that the buyer’s environmental ideals are ranked lower than their tolerance for inconvenience. Some EVs were and are shedding tyres at an alarming rate, the appetite for this latest band of EV drivers to adapt to their car, the weather and to the availability of motorway charging points is minimal. So when things go wrong, as happens with relatively early tech – some hysteria sets in, which is pretty much where we are now. Manufacturers haven’t helped car retailers much either. Trying to recoup some of the massive costs of development and manufacturing meant that early EVs were super expensive and during and after Covid there wasn’t much need to reduce the price. Then all of a sudden supply freed up, APRs dropped and the SUV EV your neighbour bought for €70,000 on 4.9% APR, was now €55,000 on 0%. Happy you, unhappy neighbour.? This has made used values uncertain and has damaged the value of these vehicles second hand. There is, also, the mentality that an old EV is like an old iPhone rather than an old car. Old tech, less desirable and likely to break.

Range anxiety remains in the conversation, although at this stage I am not sure why. Few EVs will do what is claimed, in the same way few petrol or diesel cars will manage the claimed figures. It is just that the inconvenience and friction of not reaching these claimed figures is much greater in an EV than in an ICE car. You can understand some car retailers backing away from the EV market holding up their hands. People like Nadia Adan of Ashford Motors have received some stick for publicly stating that they’d not take in any more EV trade-ins. Nadia is a very smart business woman and an equally smart publicist, but you can’t blame her or any independent dealer from being hesitant about holding stock right now and for voicing their opinions either.

There are a few things to remember, however. As a buyer, you can use PCP rather than your own money when acquiring an EV. It isn’t foolproof but the GMFV (Guaranteed Minimum Future Value) does give you some security for now until things settle down a bit. A further ten years from now, a huge bulk of new car sales will be EV and we will probably be in a situation where petrol and diesel cars will be taxed to the point of being unbearable. But will that fix the uncertainty about the technology and the values? In the short-term, no. So how can that be fixed?

That is where the government would have to step in, by making the used ones more attractive and desirable. Offer grants for buyers in the used car market moving out of ICE cars to EVs, but shopping in the lower end of the segment. If you get an additional amount of money to purchase your EV rather than your ICE car, this could increased demand for them, and make the pricing more stable. As of today (April 4th 2024) there are 745 used EVs on DoneDeal Motors for less than €20,000. Until the government finds a way to help regular motorists choose these cars then there might be issues. You can understand the hesitancy. I bought a Volkswagen e-Up! in September for €30,000 (which I love) but a few weeks later it was on sale for €19,995. BYD and other Chinese brands have disrupted the market for the better and we will see new prices drop, for much better cars. What is clear is that we don’t have a choice. Domestic and EU emissions targets mean this is coming, but we all need to find better ways to manage the transition.

?(All views are the views solely of the author and not their employer)