The Government’s limited EV scrappage scheme for used cars registered in 2013 is already oversubscribed, according to dealers.
The scheme, announced at the start of June, is funded by €10 million and had planned to offer €5,000 on top of the current €3,500 SEAI grant - with all funds coming from the €10 million fund. That would have catered for 1,177 new EV purchases. Meanwhile, new EV sales are expected to exceed 30,000 this year.
However, a spokesperson for the Department of Transport said on Thursday that “following consideration of a range of approaches, and based on the hugely positive response to the scheme from the sector and the public, the Minister has instructed that the scheme be refined to optimise the number of electric vehicles that can be purchased”.
“So the €5,000 scrappage payment will support the transition of up to 2,000 vehicles from internal combustion engine (ICE) vehicles to electric vehicles (EVs), with the full €10 million allocation from the Climate Action Fund now reserved for these payments,” they said.
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Even with the turnaround on the scheme, 2,000 cars may fall well short of market demand.
Nigel Brennan, dealer principal of Hutton & Meade, a large Dublin-based operation selling Hyundai cars and Maxus commercial vehicles, said that following a discussion between a group of dealers and the Sustainable Energy Authority of Ireland (SEAI) on Wednesday, it now seems the scheme is already oversubscribed by more than 700 cars.
“We did a straw poll, during the webinar with the SEAI,” Brennan said. “And out of 116 dealers, all of whom were asked how many scrappage deals they’d done, it comes to 1,900 cars sold. So that’s around 700 more than will actually be available. And there are around 250 dealers in the country. Now, some of those won’t actually be able to do any scrappage deals, because their cars will be too expensive.”
The Government may face a backlash if it turns out that hundreds of potential electric car buyers will be told on July 1st they’re not eligible.
But have dealers jumped the gun and made promises to customers that can’t be kept?
“We’re offering the people the opportunity to buy the cars with the assistance of the Government, subject to that assistance being forthcoming,” Brennan said.
The scheme requires that 65 per cent of the budget is reserved for rural applicants living outside large cities such as Dublin, Cork, Galway and Limerick.
Given the emphasis on rural sales and with more than 20 dealers in Dublin alone, July is likely to be messy, at the very least, for car traders in Ireland as they encounter customers who thought that they were getting a grant but now are not.
“It’s going to turn the 1st of July into a day from hell,” said Brennan.
“There will be all the drama of ‘Did I get my grant or not?’ and phone calls from people, and then the customers who aren’t buying on scrappage but who are keen to get their new 262 plate car on the first day of the new registrations.”
Annoyingly, Brennan says that the scheme is working in that people are aiming to trade in cars dating back to 2010. “We’re even seeing people coming in, trading in the cars that they bought in the last scrappage scheme,” he said.
The likelihood is that the scheme will be reintroduced either later in the year or in the run-up to the 271 number plate switchover in January, traditionally the busiest time for new car purchases.
The Irish Times has contacted both the SEAI and the Department of Transport for comment.
