Electric cars are increasingly prevalent along these shores, and with their growing popularity, it is expected that incentives will naturally diminish. However, during the unveiling of the 2024 Budget, Finance Minister Michael McGrath affirmed that certain measures will remain in effect, while others will gradually phase out over the coming years.
The key alteration to Ireland's electric vehicle (EV) incentives is the reduction in the grant for purchasing a new electric vehicle, which previously reached up to €5,000. As of January 1, 2024, the maximum grant has decreased to €3,500 for qualifying vehicles.
To qualify, a vehicle must be fully electric, fall into the M1 (passenger car) category, and have a cost ranging from €18,000 to €60,000. This cost includes optional extras, paint, and delivery charges but excludes grants or rebates. Vehicles exceeding this price range are ineligible for grants, while those priced lower will see a reduced grant in line with the vehicle's cost.
For instance, an EV priced between €14,000 and €15,000 is eligible for a €1,500 grant. The grant increases to €2,000 for cars costing €15,000-€16,000 and rises further to €2,500 for cars priced €16,000-€17,000. The full grant structure is outlined in the table below.
Additionally, government incentives for EV buyers include Vehicle Registration Tax (VRT) relief. While VRT for high-emission vehicles remains high, the relief scheme for reasonably priced electric cars has been extended until the end of 2025. EVs with a purchase price below €40,000 remain exempt from VRT, with buyers of vehicles costing between €40,000 and €50,000 receiving partial relief. Vehicles exceeding €50,000 do not benefit from VRT reduction, although EV drivers still pay less VRT compared to other power sources due to emissions-based rates.
The Benefit-in-Kind (BIK) tax breaks for EV drivers have been extended, with a €10,000 deduction from the Original Market Value (OMV) continuing through 2024. An additional €35,000 deduction applies to cars available in 2023, 2024, and 2025. In summary, drivers of cars with an OMV below €45,000 pay no BIK tax on vehicles available in 2023 and 2024, with higher OMV vehicles only paying BIK on the amount above €45,000. The OMV deduction decreases in the following years, reaching €10,000 by 2027. Despite this reduction, EVs will still incur less BIK than similarly priced combustion-powered vehicles due to emissions-based tax rates.
The Low Emission Vehicle Toll Incentive (LEVTI), introduced in 2018 to encourage low- and zero-emission vehicle use through toll discounts, ended earlier than scheduled on November 1, 2023, due to high demand. Consequently, all private vehicles must now pay the full toll price.
For those charging electric cars at home, the grant offered by the Sustainable Energy Authority of Ireland (SEAI) has decreased from up to €600 to €300, with eligibility contingent on meeting specific criteria.