Ireland’s Minister of Finance, Paschal Luke Donohoe, introduced this week a new measure to accelerate the deployment of electric cars in the country through businesses in their new budget.
The government will give tax breaks over one year for electric vehicles used as company cars.
It was introduced as a tax break on benefit-in-kind.
The Irish Times reports:
“Under 24,000km the benefit-in-kind is 30 per cent of the value of the car, while more than 48,001km it is down to 6 per cent of the value of the car. A company director driving less than 24,000km in a company car that costs €60,000, would see a notional €18,000 added to his/ her salary for tax purposes. Typically, this would result in an additional tax cost of about €9,000 a year.“
Therefore, it could be made an attractive incentive to update company fleets and also see savings from lower gas and maintenance costs.
The new measure is added to several existing EV incentives for buyers in the country:
- €5000 SEAI plug-in grant for personal purchase (€3800 for business)
- 14% VRT tax band and €5000 relief for BEV
- Low annual road tax of €120
Yet, Dave McCabe from the Irish Electric Vehicle Owners’ Association has said his group is “underwhelmed” by the new incentive in the budget. The association is particularly disappointed by the lack of efforts toward a broader deployment of the charging infrastructure in the country.
The Irish EV market is still incredibly small with fewer than 1,000 electric cars sold so far this year. It represents less than 1% of the passenger car market.
Nonetheless, it saw a 25% growth this year, but that’s mainly due to the introduction of the Hyundai Ioniq Electric, which proved to be the best-selling EV in the country after just a few months in the market.
Tesla launched in Ireland only earlier this year and it is apparently still trying to find its footing in the market with just a few dozens cars delivered so far based on registrations.