May 17, 2023

Cyprus's slow ride on the electric car bandwagon, KNEWS

Maria Eracleous

We are slowly rushing towards zero-emission transportation. The data from new vehicle registrations indicate that while the numbers are increasing, the percentage of electric cars on Cypriot roads remains limited. Of course, this percentage depends on the selection criteria as well. For example, during the period of January to April 2023, out of the total new vehicle registrations (4,784), around 4% were new electric car registrations. This percentage remained consistent in 2022 as well. It should be clarified that this percentage pertains to new sedan vehicle registrations. When we consider the data for overall registrations, both for used and new sedan cars, the share of electric vehicles diminishes. However, within seven years, by 2030, 25% of new vehicle registrations should be electric, according to Cyprus' national target, and by 2035, this percentage should increase to 100%. This means that we need to accelerate both incentives and infrastructure development.

Cost and Charging

The purchasing cost is a significant factor that seems to hinder the acquisition of an electric vehicle, as well as the battery replacement cost, with an average price of around 10,000 euros. Another parameter is the limited charging infrastructure for such vehicles. Currently, there are a total of 31 dual public charging stations operating in Cyprus, along with some additional ones from private initiatives. It should be noted that the EU document mentioned earlier also highlights that the number of charging points per vehicle in Cyprus is the lowest in the EU. The charging time is also a concern for potential buyers. It's not easy for a driver who used to refuel their car with conventional fuel in a few minutes to choose a car that takes 2-3 hours to charge. Additionally, the range of electric vehicles is an important factor for potential buyers. Speaking to "K" magazine, Konstantinos Kapodistrias, CEO and General Manager of CHR. KAPODISTRIAS & SONS LTD mentioned that it is also a matter of whether the charging system can withstand simultaneous charging of electric vehicles if the market share of this category increases to 10%. He expressed the view that while incentives have increased interest in electric cars, substantial market shares will take a decade to materialize, as he mentioned.

Cyprus' national target for 2030 is for 25% of new vehicle registrations to be electric, and by 2035, this percentage is expected to increase to 100%.

The Brands

From the total registrations of electric private salon vehicles for the first quarter of the year (232), it appears that most registrations are for BMW models (39), followed by 23 Porsche, 22 Mercedes, 20 Audi, 20 Hyundai, 18 Volkswagen, 13 Toyota, 12 Skoda, 11 MG and 11 Nissan models, and 8 Volvo, KIA, and Ford each. There is one registration for Mazda. Additionally, 9 Tesla vehicles have been registered for the period January-April. In total, from 2022 until the end of April, 56 Tesla electric vehicles have been registered, but these are imported as used vehicles since there is no official representative in Cyprus. The data suggests that brands positioned in the market as luxury and targeting higher-income consumers gain larger market shares in the field of electrification. Another parameter is availability, as pointed out by the president of the importers' association, Alexis Anninos, noting that what we see in the first quarter of 2023 does not accurately reflect the market's actual situation. Registrations, as he mentioned, are also affected by delays in orders and production. Nevertheless, car dealerships in Cyprus have significantly increased the options for electric vehicles following the first announcement of the grant scheme for the purchase of electric and plug-in hybrid vehicles in December 2021.

Grant schemes

The increased options also bring greater interest in purchasing an electric vehicle, which has been reinforced by the grant schemes of the Ministry of Transport. People come, inquire, and get informed about the choices in electric cars, as mentioned by Alexis Anninos, President of the Association of Importers of Motor and Electric Vehicles. In several cases, this interest translates into purchases. However, he clarified that a small number of last year's car registrations are associated with the grant schemes. Specifically, in the case of plug-in hybrid cars, he stated that a significant number of buyers make purchases outside the grant scheme. Nevertheless, from the registration data, at least for the last quarter, it appears that hybrids gain significant shares in registrations. Specifically, in the first four months of the year, registrations of hybrid salon vehicles amounted to 2,806, accounting for 25% of the total registrations for the period. "Interest in hybrids has not decreased, more and more cars are offered with some form of hybridization," Mr. Anninos mentioned. Regarding electric models, he expressed the estimation that it will take time for market shares to increase, and the transition will happen gradually. He even linked the low percentages to the fact that grant schemes were delayed compared to other European countries.

The seven recommendations of SOAK (Council for Economic and Competitiveness of Cyprus)

The chapter on electromobility engaged the Council for Economic and Competitiveness of Cyprus, which acknowledges that efforts are being made by the state. However, it concludes with seven recommendations aiming to promote electromobility in Cyprus.

- Subsidizing interest rates for loans for green vehicles, so that the interest rates for electric vehicles are lower compared to conventional vehicles.- Exemption from road taxes for a specific period, which will be an advantage for the electric vehicle market.- Reduction of taxes for companies using electric vehicles for their transportation needs. Additionally, it is suggested to provide special tax incentives for a certain period to companies that install charging points for both their own vehicles and for use by their employees/customers with electric vehicles.- Another incentive for companies could be the subsidy of a specific amount for the replacement of a maximum number of vehicles per year, which would be implemented for a period of five years.- An important prerequisite for the transition to electric vehicles is investment in charging infrastructure. The lack of a charging station network is a hindering factor in promoting electrification. Expanding the charging network is essential, and providing incentives from the government to attract private sector interest in this matter is crucial. Incentives could be offered to businesses, hotels, and private parking spaces for installing charging points, thus contributing significantly to the electrification efforts.- Creating parking spaces exclusively for electric vehicles is another measure that will enhance the use of electric cars. It is important for these spaces to have charging points as well.- In addition to the above, with this proposal, SOAK once again raises the issue of further support for efforts to improve public transportation, which should now be focused on green transition and electrification. Specifically, there is a need for support in the public transportation fleet and better targeting, such as strengthening the fleet with small electric buses for city center routes, improving bus stops, and installing modern "green shelters" with photovoltaic systems that provide protection from weather conditions, lighting, and electric information for bus routes, as well as increasing the schedules of electric buses, especially in areas where there is evident higher demand due to passenger needs.

[This article was first published in Kathimerini's printed edition of Oikonomiki and translated from its Greek original]

Cost and Charging The Brands Grant schemes The seven recommendations of SOAK (Council for Economic and Competitiveness of Cyprus) [This article was first published in Kathimerini's printed edition of Oikonomiki and translated from its Greek original] TAGS