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2022 A Year of Uncertainty

2022 has been a year marked by major world events: the emergence from restrictions of the coronavirus pandemic, the outbreak of war between Russia and Ukraine, a high-risk global geopolitical environment, the ongoing Climate Change crisis, global supply issues, along with an energy and a cost-of-living crisis. All these events have led to the creation of a year of intense uncertainty, which will continue into next year and maybe beyond. 

The invasion of Ukraine has created massive uncertainty around supply chains, impacting on the supply of food, energy and industrial materials, all of which have contributed to the surge in inflation. The global economy, which had been looking at a post-Covid rebound, is now experiencing a slowdown, with the likelihood of recession in many major economies. While the Irish economy has been remarkably resilient, with very strong tax revenues and record high employment levels, consumer confidence is fragile, and this caution has started to feed into retail spending. Despite a high level of personal savings, greater consumer caution is now likely with the cost-of-living pressures draining real disposable incomes.

The new car market to the end of November is in line with last year, but the continuing low levels of new car sales is undermining the drive to reduce emissions. Commercial Vehicles have been subdued, with Light Commercial Vehicle sales down 18% and Heavy Goods Vehicle registrations are down 9%. Supply disruptions wrought by Covid-19, Brexit, geopolitical uncertainty, the global chip supply shortage, combined with potential rare mineral shortages keeping battery prices high, have contributed to the delay of the availability of electric vehicles in 2022. Supply remains a massive constraint on the market, with both retailers and manufacturing hoping for greater certainty in 2023.

Despite the marginal increase in vehicle registrations, electric car sales continue to grow strongly, with 15,591 electric cars sold up until the end of November, an 83% increase on the same time last year and a nearly four-fold increase on 2020. Petrol remains the dominant engine type, however, market share is changing rapidly, with hybrid, electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) now accounting for over 41% of the market. To continue this momentum towards electrification, it is vital that Government and Industry work closely to create an environment where EVs remain not only a strong environmental choice but also a cost-effective choice for consumers and businesses. This includes targeted Government support in the establishment of a national charging infrastructure, and the extension of EV purchase incentives at current levels beyond June 2023. As any early removal or reduction in supports will only lead to less demand, increased cost to change, restrained consumer confidence, and place Ireland further down the manufacturers’ lists in terms of EV supply availability.

The strong performance of the EV market can be attributed to the greater EV choice from vehicle manufacturers, particularly in the family segment, and the vital support of the SEAI grant scheme. The EV grants for the first half of next year provide some stability in a highly volatile retail environment and will hopefully encourage car buyers into dealerships. 

The climate crisis poses a much bigger challenge than anything we have experienced in recent decades. It is fundamental that policymakers support their climate ambitions and invest in the electrification project. The forthcoming revised Climate Action Plan is an opportunity to continue the investment in the EV project, while at the same time dealing with our legacy fleet of older polluting cars. Those with the least economic capacity, will have to make the biggest change and should be helped, not punished. We have already seen the impacts of the cost-of-living crisis, which is pushing people to the brink, with rising fuel prices, interest rates and inflation costs. The majority of motorists are used car buyers and Government must support all motorists to trade up to newer less polluting cars. There is an urgent need to create a second-hand electric vehicle fleet, which can only come from a vibrant new car market that will need to grow significantly over the next number of years. The national charging infrastructure must also remain ahead of demand if we are to provide consumers with confidence in the transition to electrification.

The decarbonisation of the transport sector requires a series of measures, there is no one quick solution and we cannot simply rely solely on electric vehicles alone to achieve targets. Public transport and active travel have a part to play so commuters are provided with viable transport options. 

While 2022 may be characterised as a year of uncertainty, I hope 2023 will be a year that will bring greater clarity, resilience, improved supply chains, a better economic outlook and investment in our climate goals. On behalf of the SIMI Management Board and team, I would like to thank you for your support throughout the year. We wish all who work with in the Motor Industry and their families a happy Christmas and a safe, healthy, positive, and prosperous New Year.



Brian Cooke

Director General, SIMI