Electrifying Cyprus: Only 2.5K EVs drive the change

A total of 26,462 vehicles have been registered with the Department of Road Transport between January and July 2023, according to the most recent data released by the Department of Statistics. Out of the overall new registrations, 701 were electric vehicles, with 502 of them being private saloon cars. This accounts for 2.65% of all new registrations. Additionally, the same data indicates that around 6 thousand vehicles were hybrids, out of which 5,300 were private saloons. This constitutes approximately 22.6% of all new registrations. When combining the registrations of both hybrid and electric vehicles, the collective percentage reaches 25% of all the new vehicle registrations during this seven-month period.

However, the objective is to boost the number of electric vehicles, aligning Cyprus with its obligations to the European Union's target of reducing emissions by 32% compared to 2005 levels by 2030. Although the figures concerning new registrations suggest progress in the direction of electrification, the share of these vehicles in the total remains disappointingly low, according to the data on total registered vehicles maintained by the Road Transport Department. Specifically, there are currently 979,171 vehicles registered with the TOM. Among these, electric vehicles total 2,566, while hybrids amount to 16,341. A third category, plug-in hybrids, contributes an additional 612 units. This signifies that out of nearly 980 thousand vehicles on Cypriot roads, only 2.5 thousand are electric, representing merely 0.26% of the total.

Interestingly, buyers exhibit a stronger preference for hybrid cars, even though these vehicles do not fall under the umbrella of the government's subsidy plans. Their market share constitutes 1.67% of the entire pool of registered vehicles. When aggregating all three categories, their combined presence accounts for 2% of all the vehicles registered.

Brand-wise electric saloon registrations for the first seven months of the year are outlined as follows:

- BMW electric models: 65 new registrations (alongside 252 hybrids)
- MG: 53 registrations
- Mercedes: 49 registrations
- Hyundai: 43 registrations (along with 338 hybrids)
- Volkswagen: 41 registrations
- Porsche: 40 registrations (as well as 52 hybrids)
- AUDI: 34 registrations (and 107 hybrids)
- Toyota: 27 registrations (accompanied by 2,045 hybrids, constituting approximately 40% within this category)
- Tesla: 20 registrations
- Nissan: 20 registrations (with 603 hybrids)
- KIA: 19 registrations (and 245 hybrids)
- Skoda: 18 registrations
- Volvo: 15 registrations (including 171 hybrids)
- Ford: 15 registrations (and 121 hybrids)
- MINI: 6 registrations
- Honda: 1 registration (and 260 hybrids)

Analyzing the data, it becomes evident that brands positioned as luxury options, targeting consumers with higher income brackets, command greater shares within the realm of electrification. This trend persists despite the notable expansion of electric vehicle offerings by car dealerships in Cyprus, which followed the initial introduction of a sponsorship scheme supporting the acquisition of electric and plug-in hybrid vehicles in December 2021.

The next project

Transport Minister Alexis Vafeades is currently directing his attention toward refining the provisions of the forthcoming subsidy plan, with a focus on devising a strategy that would extend the benefits of the subsidy to middle-class buyers as well. Furthermore, in a conversation with K, he pinpointed the key challenge behind Cyprus's sluggish progress in transitioning to electrification: the purchase cost. He elucidated that past subsidy programs witnessed an initial surge of interested parties, but many ultimately withdrew due to the financial burden associated with buying and maintaining electric vehicles. These costs are anticipated to diminish post-2025, attributable to an increase in production rates, as articulated by Mr. Vafeades.

However, the ministry responsible is not banking on car manufacturers themselves reducing costs post-2025, as they are in a race to align with the 2030 target of curbing greenhouse gas emissions by 32% (in place of the original 24%) by 2030, relative to the 2005 levels. Emphasizing the significance of 2027, he highlighted that this year serves as a milestone, demanding substantial progress towards the targets to ensure readiness for the 2030 goals and to avert resorting to the acquisition of green credits.

The criteria

An announcement regarding the upcoming subsidy scheme for electric vehicle purchases is anticipated to arrive in early autumn, either in September or October. The minister's primary objective is to devise a mechanism for subsidizing the more affordable electric cars, thereby enabling both middle-class and more economically vulnerable buyers to access them. This proposed approach will undergo scrutiny by the technical experts at the Department of Road Transport to ascertain its practical implementation.

"In my perspective, if someone can allocate 50-60 thousand euros for an electric car, governmental subsidy may not be essential. We've moved beyond the phase of incentivizing the global shift to electric vehicles, now concentrating on facilitating the transition to electrification for the middle class and those who require support," remarked A. Vafeadis. One potential scenario entails imposing a cap on the maximum cost of the desired vehicle, such as up to 40 thousand euros, which would offer a range of viable options. The forthcoming plan also envisions coupling the subsidy for electric cars with the retirement of older vehicles, creating incentives to reduce the presence of polluting automobiles on Cypriot roads.

Despite these subsidy strategies, the pace of vehicle turnover on Cypriot roads is projected to be insufficient to guarantee the comprehensive fleet transformation necessary to achieve our objectives by 2030. "We cannot solely rely on the introduction of electric cars to meet our targets; thus, we are intensifying our focus on bolstering bus adoption," the minister emphasized. In fact, he hinted that the upcoming years might witness an expansion of buses using hydrogen as fuel. 

[This article was first published in Wednesday's Oikonomiki and translated from its Greek original]