The first car we bought in 1974 was a four-year old Renault 4. It lasted another four years before the bottom fell out of it from rust.
Our subsequent two second-hand Renault 4s also survived to be eight or 10 years old. We then tried a Ford Escort, but when it was eight years old it went on fire, blocking our housing estate during the morning rush hour. While the fire was unusual most cars in the 1970s and 1980s lasted a maximum of around 10 years before they gave up the ghost.
Today things are very different. There has been a dramatic improvement in the quality of manufacturing and the reliability of cars. The average age of cars on Irish roads is around 10 years, with many still going strong at 20 years old. The average age of cars in the rest of the EU and the US is even higher at around 12 years.
The long life of today’s cars is a good thing – good for consumers and good for the environment as it involves less waste from car scrappage. Nonetheless it poses a major challenge for policies to reduce car emissions quickly as the stock of cars changes slowly.
A high proportion of the 100,000 new petrol or diesel cars that are bought in Ireland this year will still be driving in 2040, with all the greenhouse gas emissions that they bring. In addition, nearly all of the second-hand cars that are imported into Ireland each year are also fossil-fuel vehicles. This means that Ireland will be locked into very high emissions of greenhouse gases from road transport for the next 10 years. Under these circumstances there is no way that Ireland will reach its tough targets on emissions reduction for either 2030 or 2035.
Once petrol or diesel cars are bought the only way to reduce emissions significantly would be to introduce a scrappage scheme. However, such a scheme would be hugely expensive and wasteful. It took a lot of carbon emissions to make those cars in the first instance. It would be much cheaper and more environmentally-friendly to dramatically increase purchases of electric cars and put our transport emissions back on track.
Although electric vehicles (EVs) should reduce the long-run cost of motoring for their owners they are still just a small share of car sales in Ireland and the EU.
At the makers’ end an EU regulatory regime introduced in 2020 is an important lever for change. While the EU can’t effect change via taxation (which is a national competence) it has brought in rules which limit the average emissions score from each car manufacturer’s annual sales. These limits are being gradually tightened, putting increasing pressure on manufacturers to sell EVs.
Carmakers who do not sell enough EVs to meet their emissions ceiling are heavily fined. In 2021 Volkswagen narrowly missed its target because of late availability of its new ID3 EV model and was fined €100 million. To reduce its average emissions score a carmaker could take the option to link-up with a company such as Tesla that only sells EVs, making a side-payment to the partner company for the privilege.
The EU regime means that carmakers are incentivised to sell their EVs at a much lower margin, to encourage sales, and will have to charge a much higher price for their fossil fuel cars to pay for any potential fine. Effectively manufacturers are “taxing” fossil fuel cars and “subsidising” their EVs.
Despite the EU rules EV sales have plateaued at a relatively low level across the EU as well as in Ireland. It’s not fully clear why customers remain resistant to buying an EV – but factors other than price, like range anxiety, poor charging infrastructure, battery life may play a part. Understanding the “why” is key to designing policies to resolve these difficulties and increase take-up of EVs.
A subsidy scheme for taxi drivers to buy EVs has been successful in unexpected ways. The drivers of all the EV taxis I have taken have spoken volubly of how much the EVs are saving them. They are the best advertisement for the rest of us on what we are missing out through not driving an EV.
In Ireland 30 per cent of car sales are second-hand imports, mainly from the UK, which are not affected by the EU regulatory regime. To stimulate greater EV ownership it would make sense for the new Government to tax second-hand imports of fossil fuel cars and use the revenue to subsidise second-hand EVs.
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