Dáil Éireann Debate, Thursday - 13 May 2021
222. Deputy Denis Naughten asked the Minister for Finance if consideration is being given to the introduction of a scrappage scheme for fossil fuel cars to facilitate the uptake of electric vehicles; and if he will make a statement on the matter. [25371/21]
View answerOfficials from my Department have considered the introduction of a car-scrappage scheme for fossil fuel cars to facilitate the uptake of electric vehicles, and it is the Department’s view that a VRT based car-scrappage scheme is unlikely to work well.
Typically, a scrappage scheme works via the mechanism that older cars are traded into dealerships for scrappage, in exchange for a VRT relief on the purchase of a new car. The current system already provides for a €5,000 relief on VRT for electric cars valued at an open market selling price of €40,000 and below, with a tapered relief up to €50,000. In addition, low-emitting electric vehicles will benefit from a low VRT rate of 7%. A car scrappage scheme based on the provision of VRT relief would therefore be ineffective because no (or a much reduced rate of) VRT is paid on the registration of most Battery Electric Vehicles to begin with.
Furthermore, the target for the scheme would be motorists with older cars. There is unlikely to be much crossover between the population of motorists with old low-value cars and the population of motorists who might be in the market for a new, more expensive electric vehicle.
For these reasons, there are currently no plans to introduce a car-scrappage scheme.
