Grants cut for plug-in hybrids and electric cars

kop-end · 12-04-2021 10:38AM #1

So the grant for PHEV is being cut in half and the grant is being taken away completely for all full EV's over €60k list. This does make the mid-print range full EV's more attractive now.

The problem is, with all this chopping and changing in grants for this market and the lack of clarity on a long-range plan, its easy to see people stay away for a few more years.

https://www.breakingnews.ie/lifestyle/explainer-grants-cut-for-plug-in-hybrids-and-electric-cars-1108680.html

liamog · 12-04-2021 10:45AM

Pretty much the opposite happens in other markets, people tend to bring forward a purchase to get in before the change.

whippet · 12-04-2021 10:47AM

its obvious that the grants will be decreasing as the uptake increases .. so should encourage more people to avail sooner rather than later.

Lantus · 12-04-2021 10:59AM

I don't think so. Ev cars are very much in demand and consumers know it. They are already economic and the quicker the grants are withdrawn the quicker pricing can stabalise and become competitive.

The 60k plus grant is a nonsense and accounts for a tiny number of wealthy people that shouldn't really have been able to get a free discount paid for by people who will never be able to afford such a car. Ultimately the manufacturer is the real winner pocketing the free cash.

Remember vw sank 1.62 BILLION into developing the veyron and made a 6 million loss on each one with no grants whatsoever. Yet we are told they cannot make a family affordable ev for around 30k without governments handing over people's money. Please, don't waste my time. (Not you op!)

innrain · 12-04-2021 11:38AM

kop-end wrote: »

This does make the mid-print range full EV's more attractive now.

The problem is, with all this chopping and changing in grants for this market and the lack of clarity on a long-range plan, its easy to see people stay away for a few more years.

More one waits less attractive would be to get a BEV. When the grants will be fully removed they will have the same price with ICE cars but ICE of the future will be more expensive than today's ICE.
I don't really so how the mid-point price range will get more attractive? Because the PHEVs are out? Most of the PHEVs subsidized this year would be higher than mid range. The table below shows the first 5 plugin hybrids brands sold this year. BMW VOLVO and LR make 45% of the market
Rank Make 2021 Units 2020 Units % Change
1 BMW 587 333 76.28
2 KIA 569 273 108.42
3 VOLVO 346 83 316.87
4 LAND ROVER 297 81 266.67
5 RENAULT 204 0 -
I tend to believe that on the short term the 45k-55k segment will get a tad more expensive just because the +55k is getting more expensive.
By July the +55k segment would be hit with 2 price increases in the year. VRT and grant removal making them >8k more expensive than the 2020 models (not counting the VAT increase for some).
That will make the large batteries variants of the same model undesirable. Like Model 3 LR +65k (vs SR+ 50k) or Enyaq IV 80 full kitted +60k or ID4 Max +63k. Would they reduce the price to squeeze under the 60k threshold? Possible, but would they also reduce the price on the lower priced models? I doubt it

quokula · 12-04-2021 01:01PM

Lantus wrote: »

I don't think so. Ev cars are very much in demand and consumers know it. They are already economic and the quicker the grants are withdrawn the quicker pricing can stabalise and become competitive.

The 60k plus grant is a nonsense and accounts for a tiny number of wealthy people that shouldn't really have been able to get a free discount paid for by people who will never be able to afford such a car. Ultimately the manufacturer is the real winner pocketing the free cash.

Remember vw sank 1.62 BILLION into developing the veyron and made a 6 million loss on each one with no grants whatsoever. Yet we are told they cannot make a family affordable ev for around 30k without governments handing over people's money. Please, don't waste my time. (Not you op!)

The point of the Veyron was to make that money back in marketing value. It is not feasible for car companies to make a loss on their cars as standard, or they won't be in business very long, that should be pretty obvious.

I agree with the general point though that high end luxury cars shouldn't be getting a grant, it makes sense to eliminate it for cars above 50k at least. I think it probably is still needed in the 30k range for a while longer to get uptake to continue. Ultimately manufacturers will be setting target costs based on grants that exist in much larger countries and Ireland will just need to follow that trend.

kop-end · 12-04-2021 01:13PM

liamog wrote: »

Pretty much the opposite happens in other markets, people tend to bring forward a purchase to get in before the change.

Agreed, but I think in Ireland we are depending on business to support the uptake for Ireland to reach its targets. i.e. Full EV's to be used as company cars, 0% bik, reduced tolls, etc...
As most companies/company car drivers operate on a 3 year/5 year lease cycle, the constant changes in grants and subsidies makes it hard for them to calculate the savings on the life of the lease.

liamog · 12-04-2021 01:47PM

kop-end wrote: »

Agreed, but I think in Ireland we are depending on business to support the uptake for Ireland to reach its targets. i.e. Full EV's to be used as company cars, 0% bik, reduced tolls, etc...
As most companies/company car drivers operate on a 3 year/5 year lease cycle, the constant changes in grants and subsidies makes it hard for them to calculate the savings on the life of the lease.

You only get the SEAI grant at the purchase time, so not sure why this would affect lease planning.

kop-end · 12-04-2021 01:53PM

liamog wrote: »

You only get the SEAI grant at the purchase time, so not sure why this would affect lease planning.

True, I think my comment is more based on the BIK relief for driver, Toll Road releifs and writing off some tax implications in year 1, etc, etc.....

ei9go · 13-04-2021 10:03AM

Its also ridiculous that you can get a grant every year for a new car. I would have thought that after buying a new car with a grant, you should have to wait at least three years before you get another grant.

liamog · 13-04-2021 10:11AM

ei9go wrote: »

Its also ridiculous that you can get a grant every year for a new car. I would have thought that after buying a new car with a grant, you should have to wait at least three years before you get another grant.

What purpose would this serve other than to lower the number of EVs entering the market?

ELM327 · 13-04-2021 10:34AM

removing the grant for >60k cars means that diesels or sports cars will be purchased instead of Taycans and Teslas.

KCross · 13-04-2021 11:04AM

ELM327 wrote: »

removing the grant for >60k cars means that diesels or sports cars will be purchased instead of Taycans and Teslas.

Will it? €5k is unlikely to be a big factor in that bracket. If it is, that person probably cant afford it in the first place or is stretching.

As you go further down the price segements €5k will have a much greater impact so thats where the scarce resource needs to be spent.

slave1 · 13-04-2021 11:28AM

I'm no fan of PHEV's, they've already been and gone as far as I'm concerned.
But we are nowhere near penetration point so any decision to reduce incentives is a bad decision.

We need as many EV's on the road as possible, we didn't go anywhere near the incentives other countries have given like free road tax, using bus lanes, free parking etc. and the public infrastructure is a shambles with barely a handful of hubs in play.

Pure incompetence

ELM327 · 13-04-2021 11:38AM

KCross wrote: »

Will it? €5k is unlikely to be a big factor in that bracket. If it is, that person probably cant afford it in the first place or is stretching.

As you go further down the price segements €5k will have a much greater impact so thats where the scarce resource needs to be spent.

You'd be surprised.
Its not so much the real financial situation but the perceived one.

Those expensive cars that get the grant have a knock on effect too. I bought my S for 50% of the sticker price which had a grant on it. If the first purchaser didnt buy that S perhaps I would not have gone full EV?

KCross · 13-04-2021 07:07PM

ELM327 wrote: »

You'd be surprised.
Its not so much the real financial situation but the perceived one.

Those expensive cars that get the grant have a knock on effect too. I bought my S for 50% of the sticker price which had a grant on it. If the first purchaser didnt buy that S perhaps I would not have gone full EV?

I'd have my doubts.

Ultimately its this....

Is a customer buying a €100k car going to walk away because the car is now €105k? Possibly, but unlikely.

Is a customer buying a €30k car going to walk away because its now €35k? Good chance they will.

As a percentage the €5k on the €30k car is a much much larger percentage of the overall purchase price.

Given we are not Norway and cant throw endless millions at this problem I'd rather target as many cars at the €30k segment as we can than the higher end, which just gives the impression that EV's are for the rich. That perception is important too.

80sDiesel · 13-04-2021 07:34PM

They dropped the grant to 35k in the U.K. BMW reduced its i3 pricing with the i3s dropping down to 34,805. A reduction of 7,500!

https://www.fleetnews.co.uk/news/manufacturer-news/2021/03/31/bmw-announces-significant-price-cut-for-i3-and-i3s

lukas8888 · 13-04-2021 09:12PM

KCross wrote: »

I'd have my doubts.

Ultimately its this....

Is a customer buying a €100k car going to walk away because the car is now €105k? Possibly, but unlikely.

Is a customer buying a €30k car going to walk away because its now €35k? Good chance they will.

As a percentage the €5k on the €30k car is a much much larger percentage of the overall purchase price.

Given we are not Norway and cant throw endless millions at this problem I'd rather target as many cars at the €30k segment as we can than the higher end, which just gives the impression that EV's are for the rich. That perception is important too.

My new Taycan is due in June and i was waiting to register in July but am now moving to June reg as i had factored in the 5K grant to purchase.As i have a 3 year old Panamera hybrid i would not not have changed without the 5K grant.Now can some one pass me the tissues.

KCross · 13-04-2021 09:18PM

lukas8888 wrote: »

My new Taycan is due in June and i was waiting to register in July but am now moving to June reg as i had factored in the 5K grant to purchase.As i have a 3 year old Panamera hybrid i would not not have changed without the 5K grant.Now can some one pass me the tissues.

I’d still rather a “few” high end purchases cancelled than “a lot” of lower end ones cancelled. It’s a numbers game rather than individual decisions.

All the best with the Taycan though!

Lantus · 13-04-2021 10:14PM

quokula wrote: »

The point of the Veyron was to make that money back in marketing value. It is not feasible for car companies to make a loss on their cars as standard, or they won't be in business very long, that should be pretty obvious.

I agree with the general point though that high end luxury cars shouldn't be getting a grant, it makes sense to eliminate it for cars above 50k at least. I think it probably is still needed in the 30k range for a while longer to get uptake to continue. Ultimately manufacturers will be setting target costs based on grants that exist in much larger countries and Ireland will just need to follow that trend.

Car manufacturers take risks and make losses on models from time to time. They factor it in and keep going. At worse they get bailed and worse still they fail. That's business. Apple and microsoft and numerous other companies got no grants for making even newer tech. Henry ford got no grants for making the first car.

Batteries and electric motors are not novel and cars are well developed.

Lantus · 13-04-2021 10:30PM

ELM327 wrote: »

removing the grant for >60k cars means that diesels or sports cars will be purchased instead of Taycans and Teslas.

Pure nonsense. Your trying to suggest that someone won't buy a taycan because it's 104k instead of 106k before they indulge in options....

Instead they will plum for an octavia vrs....... Elsewhere in the real world...

Mickeroo · 14-04-2021 09:29AM

80sDiesel wrote: »

They dropped the grant to 35k in the U.K. BMW reduced its i3 pricing with the i3s dropping down to 34,805. A reduction of 7,500!

https://www.fleetnews.co.uk/news/manufacturer-news/2021/03/31/bmw-announces-significant-price-cut-for-i3-and-i3s

I'd be very surprised if this isn't what happens with most EVs as grants change or are removed. If dropping below the threshold is too much they will just lower the on the road price by the value of the grant instead imo (so basically cars stay the same price they are now).

blackbox · 14-04-2021 09:42AM

slave1 wrote: »

I'm no fan of PHEV's, they've already been and gone as far as I'm concerned.

I just don't understand this attitude. PHEV is the only sensible route to electric for many, especially those outside cities.

It will be many years before infrastructure for refuelling matches petrol and diesel.

.

innrain · 14-04-2021 09:42AM

Last month announcements elsewhere in EU:
Spain
https://www.electrive.com/2021/04/11/spain-announces-new-e-mobility-subsidy-programme/
Germany
https://europe.autonews.com/automakers/germany-offers-65b-funding-ev-charging-infrastructure

We're competing with this countries. We'll pay fines for non-compliance as FCA/VW pays Telsa carbon credits. They'll use the money to fund more of these and so on. If this is not called digging your own hole I don't know what it is.

ELM327 · 14-04-2021 09:56AM

Lantus wrote: »

Pure nonsense. Your trying to suggest that someone won't buy a taycan because it's 104k instead of 106k before they indulge in options....

Instead they will plum for an octavia vrs....... Elsewhere in the real world...

No, I'm suggesting that instead of buying a 745e they buy a 730d. instead of a taycan they buy a diesel panamera. Instead of a model S performance they buy an S6.

liamog · 14-04-2021 10:55AM

Mickeroo wrote: »

I'd be very surprised if this isn't what happens with most EVs as grants change or are removed. If dropping below the threshold is too much they will just lower the on the road price by the value of the grant instead imo (so basically cars stay the same price they are now).

It's much easier to ignore the Irish sized market.
Realistically our grant's are competing for a manufacturer to sell cars here instead of other countries in the EU. If you have to sell 200,000 EVs across Europe to maintain regulatory compliance then you will do so in the countries that give the most profit.

We balance the need of the manufacturer to be EU compliant, with our need to lower local CO2 emissions.

Orebro · 14-04-2021 01:19PM

So many people thinking that they should be subsidized into electric cars, forgetting that every euro put towards a car means a euro not going elsewhere. Car subsidies always make me uncomfortable as they assist the better off in society - someone well heeled getting a subsidy to get the latest Tesla, VW, etc while the person that cannot afford a newer car gets screwed over again. (Just like from 2008 the better off bought their new Lexus or BMW to take advantage of the new lower road tax while the less well off were left behind paying huge road tax).

Cars have always been and always will be seen as a luxury item by the Irish Gov. The real change and increase in EV numbers will happen when they start to turn the screw on fuel prices, road tax on fossil cars etc. and remove the EV subsidies.

innrain · 14-04-2021 01:45PM

Orebro wrote: »

So many people thinking that they should be subsidized into electric cars, forgetting that every euro put towards a car means a euro not going elsewhere.

In fossil fuel subsidies? 2.3 billion in 2019

liamog · 14-04-2021 01:58PM

Orebro wrote: »

someone well heeled getting a subsidy to get the latest Tesla, VW, etc while the person that cannot afford a newer car gets screwed over again. (Just like from 2008 the better off bought their new Lexus or BMW to take advantage of the new lower road tax while the less well off were left behind paying huge road tax).

Car is sold new for €40,000 and depreciates by 40% over 3 years.
Second car buyer pays €24,000.

Same car is sold for €30,000 with incentives and depreciates by 40% over 3 years.
Second car buyer pays €18,000.

The initial purchase incentives are passed on to future buyers of cars. So everyone person in the chain of ownership eventually benefits.

Casati · 14-04-2021 02:08PM

Is the €60k limit pre or post grant? I.e. If its pre grant then an E.V. with price after grant of today €55k will rise to €60k, is that correct?

Orebro · 14-04-2021 02:30PM

liamog wrote: »

Car is sold new for €40,000 and depreciates by 40% over 3 years.
Second car buyer pays €24,000.

Same car is sold for €30,000 with incentives and depreciates by 40% over 3 years.
Second car buyer pays €18,000.

The initial purchase incentives are passed on to future buyers of cars. So everyone person in the chain of ownership eventually benefits.

This isn’t sustainable at scale though - fine for the few EVs being sold at the moment but the Gov can’t possibly continue subsidizing EVs forever - there’s only another budget or two left in it I would imagine.

Grants cut for plug-in hybrids and electric cars

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