While new car sales continue to decline, sales of electric vehicles (EVs) are up 3.39pc this year. But the 2,956 battery EVs sold represent less than 4pc of the new car market, so there is still a long way to go before the numbers look remotely on course to meet the Government's target of 840,000 passenger EVs on the roads for 2030.
Though the cost of new EVs is coming down, the high price is still an inhibiting factor. The tipping point is predicted to come in two to three years, when price parity is expected - selling for the same price or cheaper than petrol or diesel equivalents.
However, a recent report commissioned by the Financial Times found that electric car costs are unlikely to fall before 2030. This makes an electric future extremely challenging as EVs will continue to require costly government support in the form of grants and incentives for at least another decade.
While electric cars are crucial for car makers to meet stringent EU regulations on carbon dioxide emissions, bridging the gap between the cost of developing EVs and selling them at a profit is proving a difficult task.
However, not everyone is in agreement that parity will take a decade. The projections of the campaign group Transport & Environment, in a recent report, are more optimistic and suggest falling battery pack prices will take some electric cars to price parity in 2022.
It is unclear what impact Covid-19 will have on the transition to EVs. Deloitte Consulting estimates that annual car sales are unlikely to reach pre-Covid-19 levels until 2024, with EVs likely to capture a disproportionate share of the market as the slowdown will be a result of a decline in petrol and diesel car sales.
Government will also play a key role in boosting uptake. The adjustments to motor tax in 2008 by the Fianna Fáil and Green Party coalition demonstrated the power of a radical government policy shift - and the impact was immediate as sales dramatically moved in favour of diesel. The percentage of new petrol cars fell from 70pc in 2007 to 32pc by the end of 2009.
With looming economic uncertainty as a consequence of the Covid-19 crisis, how best can the Government provide incentives for EVs?
As the price of electric cars falls, government subsidies will reduce, but if this is likely to take longer than previously expected, then decisions should be taken on how best to maximise return on those supports.
One way to do that is to remove subsidies from high-end cars. Currently, buyers avail of a €5,000 grant from the Sustainable Energy Authority of Ireland (SEAI) and qualify for VRT relief of up to €5,000. However, regardless of whether you are buying a car with a price tag of €100,000 or €30,000, the incentive remains the same, though the consumer buying the lower-priced car is likely to be far more responsive to it. Would it not make more sense to differentiate among consumers?
In addition, green campaigners are concerned about the popularity of SUVs, including electric SUVs, so a policy of subsidising lower-priced models may encourage the sale of smaller, lighter cars.
Despite the fact that most new EVs are capable of travelling 400km on a single charge, many buyers are put off by the lack of a well-maintained, visible and easily accessed public charging network.
While a €20m investment is being made in renewing and expanding Ireland's EV public charging network, it is essential to ensure the availability of chargers in multi-tenant buildings and car parks.
Consumer demand will dictate the type of vehicles that are brought to the marketplace, but increases in taxes also influence what is bought. An increase in carbon taxes on fuel and a change to the motor tax rates, making it more expensive to own and run a petrol or diesel car, is likely to have a significant impact on buying behaviour.
Another key driver of demand for EVs is the corporate fleet sector - and while Covid-19 is changing how we work and travel, corporate car sales across Europe are falling at a slower rate than private sales, so business and fleet operators should be encouraged to consider EVs. In hindsight, the decision in last year's budget to abolish a €3,800 grant for businesses purchasing electric cars would seem misguided.
The electric car market is growing year on year, but overall market share is still low. Currently, it relies on government incentives and grants that cannot continue indefinitely. With uncertainty now surrounding how long these supports may be necessary, the Government has a chance to alter entrenched behaviours as they did in 2008.
The market won't deliver change on its own, so carrots and sticks must be introduced in next month's Budget. Reforming the motor tax system, targeting grants and incentives to lower-priced cars and supporting the corporate market will go far to curb the growth in emissions.