Government to slash electric car subsidy by 30%

The Government will press ahead with plans to slash the maximum grant available to motorists buying electric vehicles (EVs) from €5,000 to €3,500 as it switches its funding focus towards charging for infrastructure.

Under the scheme, grants of up to €5,000 are currently available for the purchase of new privately owned vehicles up to a maximum sale price of €60,000.

Those subsidies will remain in place until June 30th, after which the maximum grant available under the scheme will be cut by 30 per cent, in line with plans set out in Budget 2023.

In a statement on Wednesday, the Department of Transport said many elements of the EV grant scheme remain unchanged.

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[ John FitzGerald: Encouraging a switch to EVs in rural areas is the fastest way to cut emissions ]

“Vehicle incentives for business stay the same and SEAI [Sustainable Authority of Ireland] will continue to administer the commercially-bought EVs and large-panel vans grants at current levels,” it said. “The small public-service vehicles grant for taxi and hackney drivers administered by the NTA was renewed in February, while the Alternatively Fuelled Heavy Duty Vehicle Purchase Grant Scheme, managed by Transport Infrastructure Ireland, has also remained unchanged.”

The existing vehicle registration tax relief, which is available to a maximum of €5,000 to purchasers of electric vehicles up to the selling price of €40,000, will also remain in place.

In January, Minister for Transport Eamon Ryan said that declining EV prices were making it easier for motorists to make to switch to electric. He also said the department was shifting its focus towards funding much-needed EV charging infrastructure around the State.

“Politics is about tough decisions around the allocation of resources,” he said. “If I had a choice between a grant and putting in a charging system that benefits the whole community, I think we are best switching our supports towards the infrastructure. That is what people really want.”

His department said on Tuesday the decision “aligns with similar policies in European nations” where some governments have begun to “curb vehicle subsidies and Government investment in EVs is moving towards infrastructure”.

Last year saw some 15,462 new EV registrations in the Republic, according to Central Statistics Office (CSO) data, an 81 per cent increase on 2021 when 8,554 were licensed. The latest figures from the CSO indicate a sizeable 5,893 new EVs were registered in the first two months of the year compared to 4,311 in the same period of 2022, an increase of almost 27 per cent.

Overall, the Government hopes to double EV sales this year despite long-standing concerns about the availability of public charging infrastructure.

Earlier this month, the Oireachtas Public Accounts Committee was told that there were 77,000 electric or plug-in hybrids on the road at the end of last year. Declan Meally, director of transport at SEAI, said the trajectory is there to reach a target of 175,000 by the end of 2025.

The Government’s Climate Action Plan has a target of almost a million electric vehicles by 2030, comprised of 845,000 cars and a further 100,000 vans, trucks and buses.