Electric car grants, tax breaks to be reviewed as cost to State of continuing supports could rise to over €1.2bn for just 100,000 EVs
GRANTS and tax breaks for buying electric vehicles are to be reviewed at the end of next year as the Government looks for less costly ways of encouraging motorists to switch to cleaner cars.
report approved by Cabinet says the higher upfront cost remains the biggest deterrent to EV purchase and financial incentives are key to influencing buyers.
However, it also says continuing current financial supports would cost the Exchequer between €965m and €1.23bn for just 100,000 EVs.
The Government target is to have almost one million EVs on the road by 2030. There are only 41,000 currently on the road.
“The pace of EV transition in Ireland must be stepped up considerably,” the report says.
Cabinet is moving immediately to implement one of the report’s recommendations which is to set up an Office of Low Emissions Vehicles (OLEV) to oversee the existing supports but also to research and implement other ways of driving the change to electric.
EV buyers can currently get a purchase grant of up to €5,000, home charging point installation support of €600, relief on vehicle registration tax, reduced motor tax and reduced tolls.
Commercial buyers can also avail of more flexible tax deductions and a limited scrappage scheme.
The report, by officials in seven Government departments and the Sustainable Energy Authority of Ireland, says all those supports should continue until the end of 2022 and their suitability reviewed after that.
“It would be extremely costly to maintain the current range of incentives over the medium term,” it says.
OLEV is to come up with other ways of overcoming the barriers to buying electric, starting with giving the public more information.
The report says motorists rarely consider the lower lifetime running costs while calculating the total cost of owning an EV, and have poor knowledge about available charging infrastructure, charging times, average journey lengths, battery and the environmental impact of EVs compared to internal combustion engines (ICE)
“The current EV communication and engagement strategy could be significantly strengthened,” it says.
It urges training courses for car dealership salespeople, the faster roll-out of public charging points and immediate implementation of regulations requiring new buildings to provide charging points.
It says fare comparisons should be on display at fuel pumps showing the cost per 100km of travel by diesel, petrol, electricity and hydrogen.
EV use should be the norm in public sector fleets and congestion charges and low emission zones should be introduced to favour EVs, it says.
The report also says the Department of Finance needs to look at targeted taxation that would act as a disincentive to buying an ICE car.
Ideas rejected by the officials included restricting the issuing of new licence plates for ICEs, introducing a general scrappage scheme and allowing EVs use bus lanes.
Transport is responsible for about 20pc of Ireland’s greenhouse gas emissions. Transport Minister Eamon Ryan said halving that by 2030 would require a “major step change in how we travel”.
He added: “Nobody can be in any doubt of the urgency of the task that faces humanity in tackling climate change and the threat that it poses to our planet.”