Motor industry revving up for electric future

Cantillon: themes of Frankfurt motor show will be electric cars and death of diesel

If our motor transport is to be electrified the Government is going to have a big hole in its coffers. Photograph: Getty Images

If our motor transport is to be electrified the Government is going to have a big hole in its coffers. Photograph: Getty Images

 

The motoring world descends on Frankfurt on Tuesday for the biggest auto show in the world. Two themes will dominate: a surge of new electric models and the death of diesel.

The biennial show marks the second anniversary of VW Group’s emissions cheating scandal.

Back in 2015 motor tax regimes across Europe were structured to persuade people to opt for diesel. Now it seems diesel is the devil, spewing poison into the air in towns and cities. National and local governments are setting out timeframes to ban diesel passenger cars.

So is this the death of diesel? Technically the answer is no. Fundamentally, there are customers out there whose usage profiles – high mileage motoring – are currently best served by diesel. Similarly, commercial transport will depend on diesel for at least the next decade. And there are senior engineers who reckon diesel technology could even be cleaner than petrol engines by 2020.

Before councils introduce outright bans they need to be sure they are working the accurate data on exactly how much air pollution is caused by private diesel cars in urban areas compared, for example, to what’s emitted from public transport vehicles or even wood-burning stoves.

Yet the public’s perception of diesel has radically altered, and car firms don’t seem interested in fighting for its future.

A radically changing motoring landscape will hit the resale value of motorists, undoubtedly causing anger towards politicians and car firms who actively encouraged them to opt for diesel.

It will also be an issue for the Minister for Finance. As Paschal Donohoe prepares his first budget he needs to be aware of the upheaval ahead in the transport arena, which at present accounts for some 7 per cent of Government revenue.

Currently motor tax on electric vehicles is low and because they use no petrol or diesel all of the revenue from this source also disappears. If our motor transport is to be electrified the Government is going to have a big hole in its coffers.

While the motor trade has been lobbying hard for Donohoe to roll out tax incentives for electric vehicles and hybrids, the reality is that a new tax regime for electric car users – either on the usage of electricity or the purchase price of the cars – is going to have to be considered in the very near future.

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