Decision to slash EV subsidy ‘disappointing’ despite market buoyance, insurance body says

The number of new electric vehicle registrations in the first three months of the year has increased by almost half with the momentum behind the zero emissions segment of the marking showing “no sign of abating”, the Society of Irish Motor Insurers (SIMI) has said. The body, however, described the Government’s decision to slash the subsidy available to EV drivers from later this year as “disappointing” at this “relatively early stage in the EV project”.

Last month, 3,421 EVs were registered in the State, bringing to 9,303 the total for the year so far. This represents an increase of 49 per cent on the same period in 2022 when 6,325 such vehicles were registered.

SIMI said that EVs, plug-in hybrids and hybrids continued to take up a bigger proportion of the market with a combined 24 per cent share at the end of the quarter. At 32.6 per cent of the market, petrol “continues to remain dominant”, it said, with diesel accounting for 22.8 per cent.

Late last month, the Government announced that it would press ahead with plans set out in Budget 2023 to slash the maximum grant available to motorists buying EVs from €5,000 to €3,500 as it switches its funding focus towards charging infrastructure.

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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.

“The momentum behind electric vehicles shows no sign of abating,” said Brian Cooke, director general of SIMI. “The Government’s temporary change to the benefit-in-kind regime for the current year is very much welcomed by both employees and the industry and will no doubt encourage the company car EV market. It is vital that this enhanced threshold is extended out beyond this year. On the other hand, the decision to reduce the electric vehicle car grant for the July registration period is extremely disappointing at this still relatively early stage in the EV project.”

Still, he said that many elements of the Government’s strategy to encourage EV take-up remained unchanged.

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Mr Cooke said: “In addition to the grant support, there is still vehicle registration tax relief for many EVs as well as low annual road tax, which along with the home charger grant means there is still a very strong basket of incentives available for those considering the purchase of an electric vehicle. It is important that there is no further diminution of these EV supports over the next couple of years.”

Overall, a total of 17,676 new vehicles were registered in the State last month, an increase of 37 per cent on March 2022, bringing the total number of registrations for the year to date to 58,116, up 16.5 per cent on the same period last year.

Almost 4,700 imported used cars were registered last month, bringing to 12,474 the first quarter total, an increase of 7 per cent after two years of Brexit and Covid-related disruption.

Meanwhile, the number of light commercial vehicles (LCVs) registered in the first three months of 2023 jumped 24 per cent to 11,587 compared with the first quarter of 2022, while heavy goods vehicle registrations (HGVs) increased by 42.6 per cent to 964.

But despite the “strong performance” of the market over the quarter, vehicle sales, in general, remained 9 per cent behind pre-Covid 2019 levels.