Cantillon: should we give eco-motoring a dig-out?

Incentives and supports: terms commonly uttered by lobbyists for loss-making industries claiming their endeavours involve a social service and not simply the pursuit of profit. It’s not the sort of vocabulary you would expect from a firm that recorded an operating profit of €12.7 billion last year.

Yet on Monday night in Geneva, on the eve of the annual car industry shindig in the Swiss city, VW Group chief executive Martin Winterkorn called for European governments to think of the opportunities and not primarily the risks of progress.

“For instance, electric cars and plug-in hybrids. In the years to come they will have to be provided with more targeted support.”

For “support”, many will read “taxpayer money”.

It is of course in the national interest to promote cleaner forms of transport. Yet it can be politically perilous to put taxpayers’ money behind the latest tech promise at a time when there are several runners in the green race.

Two recent examples serve to underline the point. First was the tax breaks for biofuel cars. As quick as it became a green favourite it went out of fashion. Filling stations weren’t prepared to invest in tanks to carry the fuel; concerns over the impact of diverting food supplies to fuel production reached a crescendo and biofuel joined the list of footnotes in the green energy debate.

Around the same time Ireland sought to be at the forefront of the electric car debate, with a target to have 20 per cent of the Irish vehicle fleet electric by 2020. That ambition quickly became unplugged, even with tax incentives: 479 fully electric cars have been registered in Ireland since 2008.

Another entrant in the alternative fuel race due for a run-out this year is hydrogen fuel cell. Toyota has unveiled the first mass-produced fuel cell family car, the Mirai (above). The benefits of fuel cell are clear-cut: hydrogen fuel can be created in eco-friendly ways, water is the only emission, and the range between refuelling is akin to a combustion engine. The only qualm is the costly roll-out of filling stations. This is where the industry is likely to look for help. Ireland has no hydrogen filling stations. It's not for taxpayers to finance one.

If we really want to put ourselves in the front seat of the next motoring revolution, creating legislative supports for the testing of self-driving cars makes more sense. Such a move would also tie in with the R&D activity of resident tech giants such as Google and Apple. They could then justifiably claim tax breaks on the back of such R&D, as could the car firms who carry out the tests here.