Proposals Set to Increase Vehicle Registration Tax on Electric Vehicles

At a time when the Government wants motorists to move to electric the TSG’s proposed recommendations include an increase in VRT on EVs.

At a time when the Government is encouraging Irish motorists to make the switch to electric, the TSG’s proposed recommendations include an increase in Vehicle Registration Tax (VRT) on EVs by an average of €1,500, with some of the more popular family models receiving a price hike as a result of up to €2,800.

This is also the case in other non-electric new cars, even those with much lower emissions than cars currently on the road, which would see an average tax increase of over €1,300, despite already being targeted in last year’s Budget. 

Speaking about the Governments announcement, SIMI (Society of the Irish Motor Industry) Director General Brian Cooke said It is entirely unconscionable that the retrograde step of effectively increasing VRT on Electric Vehicles and low emitting cars is under consideration when we are at such a critical juncture in driving down emissions from transport. The Motor Industry, while currently operating at recession levels in terms of new car sales, is now emerging from the pandemic, and is a sector that is vital to the economy, as the second highest contributor to retail consumer expenditure.  

The Industry is putting forward clear and positive plans to assist the Irish Government reduce emissions by:

  • Helping consumers to make a real and informed choice to remove the oldest and most polluting vehicles from the Irish fleet
  • Upgrading as many people as possible to cleaner newer vehicles 
  • Incentivising the new car market to move more rapidly towards electrification with an integrated achievable plan

Mr. Cooke continued: “The consumer, together with the Industry has delivered over 120% growth in Electric Vehicle sales alone this year. This level of achievement would not have been attainable without the Government supports currently in place. To reduce the EV supports now, or to increase VRT on cars already burdened by last year’s substantial tax increases, only serves to add tax to consumers who want to make better environmental choices. It also adds to customer confusion as to whether an Electric Vehicle is the right decision for them, at a time when there is more and more choice out there. These proposals, if implemented, will simply slow down growth in Electric and low emitting vehicle sales. For consumers to make better environmental choices, the best options need to be affordable. We can succeed in significantly reducing our transport emissions. By taking the 900,000 cars that are over 10 years old off the road and replacing them with newer cars we can reduce emissions by a staggering 270,000 tonnes of CO2. To put this in context, this is equivalent to the growth of 13.5 million trees in one year. The more that can be done now, the quicker a functioning second-hand Electric Vehicle market will be available, which will bring more potential EV buyers to the market. It is imperative that we build up enough stocks of electric vehicles to eventually create a thriving second hand market in this sector and this will help Ireland achieve its Climate Change targets. 

The Motor Industry is showing the way by providing the new cars that will make a real difference. We are fully committed to de-carbonising Ireland’s car fleet. If the Government is similarly committed, it should lead by example, extend the current Electric Vehicle incentives and not increase VRT further in the forthcoming Budget.”