Analysis: What are some of the reasons behind the fall in new electric car sales - and what factors may change this state of affairs?
Electric vehicle sales have been sagging in 2024 and the sharp increases in sales from the past several years have dissipated. Why is this so? First, we'll look at six big factors which have dragged down sales - and then, a look at three reasons why I believe they will recover.
Sales are down due to....
Current affairs
As humans, we experienced an existential crisis with the Covid-19 pandemic from 2020 to 2022 and, just when we were picking ourselves up after that, a ground war erupted in Europe. Both of these events disrupted Europe’s energy demand and supply chains.
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From RTÉ Radio 1's News at One, sales of new electric cars fell 24% in first seven months of 2024 compared to same period in 2023
As has happened time and again in our lifetimes and well before, a crisis in the energy supply chain forced us to re-evaluate how we live. The surge of interest in electric cars coincided with Covid and the war, and EVs gained major traction within our society. But, as also happens time and again, the supply shocks have passed, and the urgency to change goes away and our interest declines.
The cost of living and housing
Ireland and many other countries have experienced a significant surge in the cost of living. Ireland’s surge in part is driven by rapid growth in the economy and population, with huge related pressures on the cost of living and housing. The early buyers of EVs were the early adopters, environmentalists and incentivised businesses. While electric car prices have dropped, they haven’t dropped enough for the middle-classes. Buying an EV can be a luxury item for a couple in their 30s trying to get on the housing ladder, a family dealing with the cost of living or a new graduate struggling to rent a room.
Public charging challenges
Every electric car owner has their own story about long-distance driving and the public charging infrastructure. An extreme experience might be the story of getting home after 4am in the morning after getting towed to a charging station in the wee hours. This obviously doesn’t make for a happy customer or positive messaging. Such stories are rare enough although general driver discontent with public charging is real. In general, Tesla drivers tend to be happy with the Tesla public charging infrastructure, while all drivers tend to have seen their fair share of malfunctioning chargers.
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From RTÉ Radio 1's Drivetime, Prof Brian Caulfield from TCD on the best places for EV charging points
Unrealistic targets
The 2021 Climate Action Plan from the Government had a target of one million EVs on the road by 2030. It was obvious then - and is even more obvious now - that this was wishful thinking and is not possible given the required investment in public infrastructure, car prices, electricity costs and supply and the dreaded "range anxiety". That said, there’s a reasonable likelihood that we’ll get to over 300,000 electric cars on the road by 2030, and be closer to one million EVs by 2040. All going well, we will also have built out a functioning infrastructure.
Data centres
Irish data centres now store the data for a large portion of the population of Europe, many times greater than that of Ireland. Over 20% of the electricity in Ireland is now consumed by data centres and this is increasing. Some will argue that these are a necessary part of the tech economy, but others view these as electricity-and-water gobbling Frankensteins. The high demand raises the overall price of electricity for all consumers, not just electric car drivers.
Let’s do some quick calculations on the impacts of electric cars versus data centres. There are currently about 125,000 EVs on the road in Ireland. Assuming that the typical EV drives 15,000 kilometres per year and consumes 0.2 kWh (kilowatt-hours) of electricity per kilometre, how much electricity do EVs consume annually compared to data centres?
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From RTÉ Radio 1's News at One, more than 20% of all electricity generated last year was consumed by data centres
125,000 EVs doing 15,000 km a year results in 1,875 million km gross annually requiring 375 million kWh of charging electricity. That 375 million kWh for EVs in 2024 is about only 3 weeks (or 6%) worth of the electricity consumed by data centres in the past 52 weeks, which was about 6,500 million kWh.
If every one of the 2.5 millions cars in Ireland went electric, this would require about 7,500 million kWh of charging electricity, marginally greater than the electricity consumption of about 6,500 million kWh by data centres last year. Even if every car sold from tomorrow onwards was electric, it’s going to take decades for EVs to consume more electricity than data centres. Indeed, such an outcome might never happen unless there is a major crisis or a major technology shift. Our embrace of AI will further increase the energy requirements for data centres, with co-located nuclear power stations being discussed internationally as a solution to powering data centres.
Struggling manufacturers and global tariffs
Volkswagen is in the news in Germany over proposals to close manufacturing plants and lay off workers. The shift to electrification is causing turmoil for many traditional manufacturers and has global implications. The United States has announced tariffs of 100% on Chinese EV imports, the EU is following suit with lower but significant tariffs and China has tariffs on foreign EVs. We are therefore in a global trade war over EVs.
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From RTÉ Radio 1's Today with Claire Byrne, RTÉ Business reporter Adam Maguire on the rise of Chinese EVs on Irish roads
Electric car sales will recover because...
An EV may suit your lifestyle
You can now get some good deals on new and used EVs compared to equivalent conventional cars, as prices have fallen over the years for the latest and greatest technologies. While the public charging infrastructure is improving, home charging is the easiest and best approach. The batteries have definitely improved in durability and life.
Most drivers do not drive long distances on a regular basis, and most new EVs are good for the 300 to 400 km range. Your daily drives will comfortably be handled by an EV even in the most inclement of Irish weather. But, take care to plan ahead if you are going long distance. High speeds more rapidly discharge the battery so slow down. Driving on the motorway at 100 km/h instead of 120 km/h will typically get you about 100 km more in range.
Cheaper, higher quality, longer range cars
Many of the manufacturers are working hard to drive down manufacturing costs and get to a low-cost family car. We have seen the initial vehicles from the Chinese and this market will really open up when Tesla enters it in 2025 or 2026. As we get close to the end of the decade, we will be seeing the EV better priced to be a car for the masses.
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From RTÉ Brainstorm, what's going to happen to used electric car batteries?
More people switching to solar panels
As the expanding economy and datacentres have soaked up our electricity, we have turned to our neighbours across the sea, and Britain now supplies about 15% of our electricity. While the good news is that the UK has lower carbon emissions per kWh than ourselves, partially thanks to nuclear, it’s also fair to ask how we as consumers can ensure green charging?
The only way that you can guarantee the green powering of any vehicle is to use the solar energy hitting your roof. The costs of installing panels have dropped and owners marvel at the monies paid back for electricity supplied to the grid. It’s like having your own petrol dripping from the roof. Solar panels are the best-value green technology that you can buy right now because you can use the power produced to charge your car, power your home appliances or sell it to the grid.
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The views expressed here are those of the author and do not represent or reflect the views of RTÉ
