Tuesday 19 September 2017

We need to take stock of what we want in a car and what we're prepared to pay for

Toyota aims to dramatically cut CO2 emissions
Toyota aims to dramatically cut CO2 emissions
Planning for the future: Toyota
Eddie Cunningham

Eddie Cunningham

You can view what follows as either the earliest Budget submission in history or a long-term view of motoring's new revolution.

In truth, it is a mixture of both for the simple reason that the governments you vote for, via their Budgets, affect car-making plans and consumer purchases with their taxes and incentives.

We're part of an EU where some politicians/regulators are making serious calls. But at national level too we can help dictate what we want and need by deciding what to incentivise (rebates, grants) and what to punish (tax).

Everyone agrees the future is about what powers our cars and the impact on our environment and health.

Carmakers themselves are undertaking unprecedented realignments of perspective. For example, one of the 'Six Challenges' that Toyota has lain down for itself is to cut the level of C02 emissions by 90pc by 2050.

You might think 2050 is light years away but it is the incremental, and sometime dramatic, intervening measures that will transform our motoring landscape. Early next decade is primed to force more substantial emission reductions on automakers. They are trying everything to lower their average CO2 by bringing more electric vehicles, plug-in hybrids on board. But it is only a start.

Even Toyota, with all its hybrids (40pc of Yaris, Auris purchases so far this year would you believe?) will have an electric car by late 2020 to help reduce its average.

Electric cars (EVs) are one of the future's facets as battery technology, range and quicker charging all improve. But so are hybrids, petrols, diesels (to a decreasing extent) and others.

It's just that they will have to be so much cleaner than they are now. And that is going to cost - a lot.

Diesels are not in favour with many regulators. Indeed there are already discussions about banning sales by 2030.

That's only 13 years away. What will happen between then and now? What would fill the void? How would that impact on you? Imagine what 2050 could be like as a result.

All this is stemming from a Toyota briefing I had this week, just so you know, but I believe the issue is much broader than that because I think it forces us to do two things:

1.Think beyond the here and near-future.

2. Realise we need coherent, long-term carrot-and-stick policies at national level to change attitudes - and what we drive.

Beyond the here-and-now is a looming world of mixed power sources ranging from EVs to hydrogen (the UK will have 300,000 hydrogen vehicles on the road in a short few years).

Helping to shape that future now are the policies we have, continue with, or devise as a nation and a member of the EU.

Policies mean money and ultimately that's what steers buyers and sellers down certain paths.

Here's a graphic example of that. As you probably know, there is a €1,500 VRT rebate on a hybrid vehicle here. It's tiny in comparison with the combined €10,000 rebate and SEAI grant that make EV buying possible.

And yet - this is the crucial Budget/future link I mentioned - Toyota estimate if our government was to drop the €1,500 rebate the level of hybrid buying would plunge. Hybrids can be particularly 'green': a Rome university study found a fleet of Prius cars travelled on electric power for 73pc of their journeys.

So there is a strong case for keeping the incentive. And there is a case for the even 'greener' plug-in hybrids to also be afforded the sort of five-year commitment that Finance Minister Michael Noonan gave EVs in the last Budget (whether people plug in the plug-ins is a discussion for another day).

Anyway, with the current rebate there are, overall, 11,310 hybrid sales here. Toyota calculate that's an annual (16,000kms) saving of 16,973 tonnes of CO2 compared with a mid-size diesel.

Were the government to increase the rebate to €2,500, sales would rise to 16,800 and 24,576 tonnes of CO2 fewer than the diesel would be emitted.

But if the rebate were stopped sales of hybrids would plummet to 3,900 and there would be 6,144 tonnes fewer of CO2 emissions.

It just goes to show how extraordinarily sensitive pricing is for cars in the €20,000-€30,000 range - the hatchbacks and compact SUVs/crossovers so many families love and buy.

And it also goes to show how powerful a tool we have at our disposal to shape what we want. It may be simplistic to say but it does come down to money and how we as a society, now and in the future, want to use it to better ourselves and our environment.

And so to Budget 2018 . . .

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