Following the proposal by the Department of Finance’s Tax Strategy Group to raise the price of new electric vehicles by as much as €4,100 in the upcoming Budget, experts in the field are campaigning to both retain and expand EV incentives.
Despite Irish motorists being able to claim up to €10k off the price of a new electric vehicle thanks to SEAI grants, the average cost of a new EV to the consumer is €47,300 – just slightly below the average annual salary of €49,000.
Yet, the adoption of battery electric vehicles is essential if Ireland is to meet its emission reduction targets in the face of the Climate Crisis, with Irish cars collectively emitting 6 million tonnes of CO2 in 2018 alone – double the emissions from flights, according to the Environmental Research Institute at UCC.
Tom Spencer, Editor of consumer advice website IrishEVs, stated: “While there has been a 472% increase in EV sales since 2018, the incentives currently in place are not nearly enough to meet the demand for people who have lower incomes.”
“Alongside sky-high rents and reduced incomes due to the pandemic, we urgently need robust incentives to make EVs more affordable to help more people to make the transition, so that they can cut their carbon footprint. If the government does not support the essential second-hand EV market, and lower income families, they will worsen energy poverty for decades to come, and their current top-down approach will take far too long to deliver any meaningful trickle-down effect on the second hand market.”
Simon Acton, Chairperson of the Irish Electric Vehicle Owners Association and Managing Director of Next Eco Car, Ireland’s Premier used electric car sales and sourcing specialist, said: “The IEVOA and Next Eco Car are calling on the Government for a set of meaningful incentives for used EVs, and to waiver VAT and import duty on all fully electric used EV imports. Without these we will fail to deliver both on our targets and a just transition.”
“This means ensuring the availability of a strong supply of used electric vehicles, as most people never have the luxury of buying a new car. Used UK imports are essential, but the impacts of Brexit – and the prevailing VAT rules – have blunted our efforts”.
One example is that Ireland, unlike many other countries, still charges €120 annually for road tax on battery electric cars – despite the fact that road tax is designed to penalise carbon dioxide emissions, which EVs do not produce.
The second-hand EV market has also taken a hit following Brexit, which has seen prices increase on top of the existing VRT and VAT dues that are placed on these vehicles.
The necessity to retain and improve grants has also been echoed by the EV Policy Pathway Working Group, which consists of seven Government departments and the Sustainable Energy Authority of Ireland.
A recent study by the IMF showed that the Irish Government will need to invest €20bn annually – around 5% of GDP – for the next decade on climate action if it is to meet the targets set out in the Climate Action Bill.
This comes after Ireland had missed its EU2020 climate targets by a significant margin.