Change is in the air, there are wires extending from cars into strange looking parking meters littered around the streets of Dublin. There are strange looking cars zipping past making virtually no noise. Yes, I am of course talking about electric cars. No longer just some imagined futuristic mode of transport from a sci-fi movie, electric vehicles are fast becoming a common sight in Ireland. Although new electric car sales have only reached 579 as of the end of September 2017 (representing 0.45% of total new car sales in Ireland), that same figure also represents a 25% growth on new electric car sales seen in 2016. Petrol/Diesel-electric hybrids, a stepping stone between petrol/ diesel engines and fully electric engines, have recorded slightly more success registering 4,343 new sales up to the end of September 2017 representing 3.38% of the Irish new car market.
2018 Budget and the Irish Government’s Commitment to Electric Vehicles
The EU has made their commitment to cleaning up car emissions over the next 20 -30 years clear. The UK and France announced plans to ban the sale of petrol and diesel cars by 2040 while Norway has committed to doing the same but by 2025. So where does Ireland stand in all this? Transport Minister Shane Ross recently detailed his department’s vision to get rid of fossil fuelled cars by 2050, along with the desire to ensure that all new cars and vans sold in Ireland are to be zero-emissions capable by 2030.
In the 2018 budget it was expected that practical changes such as free or cheaper parking for electrical vehicles, cheaper tolls and no clamping of electric vehicles while recharging on public streets were to be introduced to incentivise people to make the switch to emission free vehicles but unfortunately this was not to be. The only change made for the coming year was a 0% rate on Benefit-in-Kind (BIK) for one year on electric vehicles, which has been seen as an underwhelming incentive and not likely to drive diesel and petrol car owners to make the switch in the short term. With that said pressure is mounting from the EU and from leaders in the car manufacturing industry to start making changes. It seems inevitable that future budgets will see diesel and petrol taxed more heavily and for the government to introduce more impactful incentives to Irish drivers to encourage them to change to electric or hybrid-electric vehicles.
Existing incentives for electric vehicles include tax relief on vehicle registration tax (VRT) to a maximum of €5,000 for fully electric cars, €2,500 for plug-in hybrid vehicles and up to €1,500 for standard hybrid vehicles. The Sustainable Energy Authority of Ireland (SEAI) offer a grant of up to €5,000 for qualifying electric vehicles when purchased privately providing the purchase price is over €14,000. Tax rates charged on electrical vehicles are also very low – €120 per annum for a fully electric vehicle and only marginally higher for a plug-in hybrid at typically €170 per annum.