Hybrids in demand; electric vehicle sales growing slowly

Barbadians’ appetite for hybrid vehicles is growing even in light of the country’s push for greater use of electric vehicles, and Governor of the Central Bank Cleviston Haynes expects the demand to accelerate as a result of lower import tariffs which took effect on Monday.

Noting that transportation was a focal point for Barbados in its quest to transition to 100 per cent reliance on renewable sources of energy by 2030, Haynes expressed concern that while the demand for electric vehicles was also on the rise, it was still very slow.

According to Central Bank data there was a spike in battery electric vehicles in the third quarter of 2020. However, since 2021, hybrid vehicles have been in higher demand.

“The quantity of renewable energy vehicles as a share of total number of vehicles imported has been steadily increasing over the last two years, equivalent on average to about 17 per cent of all cars imported,” said the Central Bank.

“However, this growth is primarily linked to an increase in the domestic demand for hybrid vehicles. Out of the total alternative energy vehicles imported, 74.6 per cent were hybrids, 24.7 per cent were battery electric and the remainder were either fuel cell or natural gas vehicles,” it noted.

In responding to a question during the recent release of the data regarding the island’s thrust towards achieving its 2030 energy goal with only about seven and a half years to go, Haynes stopped short of saying the island may not achieve its target.

“I think we still have some ways to go,” he said, pointing out that data showed Barbados does not have a high volume of electric vehicles.

“We have more hybrids…and therefore there is a long way to go in terms of making that transition.

“In terms of renewable energy I think it is probably about nine per cent of the electricity being generated is via renewables. I always say this is a very ambitious plan but we have to start somewhere. What is critical is to be able to gather momentum. We sort of started slowly but we need to be able to gather momentum with the increased installation of the photovoltaic [systems] in order to raise that number significantly,” explained Haynes.

However, with the lowering of the tariff to accelerate the weaning off of fossil fuel use by 2030, the importation of hybrid and electric vehicles is expected to grow.

In her budget presentation in mid-March this year, Prime Minister and Minister of Finance Mia Mottley announced that effective August 1, 2022, there would be an excise tax and Value Added Tax (VAT) holiday for the purchase of electric vehicles and reduced import duties for used electric vehicles to 10 per cent.

The tariff on both battery electric and solar powered vehicles – new and used – will be reduced to 10 per cent. The tax break is to remain in effect for two years.

Mottley later confirmed that the import duty on hybrids will also be lowered, though not to the same level as the electric vehicles.

“The incentives are expected to increase the ratio of electric and hybrid vehicles imported,” the Central Bank reported.

“Transportation represents a focal point of the transition. In 2018, the Ministry of Energy estimated that 33 per cent of energy consumed was in the transportation sector. Government’s transition to electric vehicles complements private sector efforts, but the take up has been slow,” said the report.

It is estimated that there are only just over 400 electric vehicles on Barbados’ road, out of the more than 120,000 vehicles in use. It is not clear how many hybrids are in use.

Statistics from the Barbados Statistical Service revealed that the island saw the greatest number of imports of renewable energy vehicles imported in the last three months of 2021, during a comparison between 2019 and the first quarter of 2022.

A further breakdown showed that for the last quarter of 2021 the number of battery electric vehicles totalled 23 per cent of all vehicles imported. Hybrids accounted for 77 per cent.

For the first quarter of 2022, the number of battery electric vehicles imported accounted for 27 per cent of all vehicles, while hybrid accounted for the remaining 73 per cent.

Haynes said he believed there was a need for greater marketing of electric vehicles at the national level.

In relation to renewable energy from photovoltaic systems, the data presented indicated that on average between 2017 and 2021, the quantity of those imported systems expanded by 76 per cent.

“Over the last five years, the amount of renewable energy generated by customers gradually increased from 20 gigawatt hours (GwH) in 2017 to 69 GwH. A rise in investment by businesses and individuals in the installation of photovoltaic systems is responsible for this expansion. At the end of 2021, the total estimated energy consumed by customers was 904 GwH, where an estimated nine per cent was generated from renewable sources of energy,” said the Central Bank data.