Richard Bruton
Question:391. Deputy Richard Bruton asked the Minister for Finance the supports that now apply to encourage the purchase of plug-in hybrid electric vehicles. [40988/22]
View answerTuesday, 26 July 2022
Questions (391)
Written answers
The Government remains committed to achieving a 51% reduction in transport emissions by 2030, and vehicle electrification will be a key part of this achievement.
A balance must be struck with how we target supports for the vehicles which provide the greatest scope for reducing emissions, while also making a value for money consideration on Exchequer impact. To that end, the Vehicle Registration relief for plug-in hybrid electric vehicles (PHEVs) ceased at end 2020, while grant support for PHEVs was removed from 1 January 2022. It should be noted that, for the top 10 PHEVs sold in 2020, four are high cost vehicles for which a grant would not be applicable and two have a direct BEV equivalent, that would be more useful in terms of decarbonizing the car fleet. Of the four remaining, three are made by manufacturers that have an equivalent size BEV model and only one model has no BEV alternative in its range.
It should also be noted that PHEV owners will still be able to avail of other incentives currently in place including:
- Tolling reductions of 25% up to a threshold of €500 per annum per household for private vehicles and a maximum annual threshold of €1,000 for commercial vehicles;
- Low rate of annual motor tax; and
- Home charger grant of €600 per household.
The Government is fully committed to supporting a significant expansion and modernisation of the electric vehicle charging network over the coming years. A national charging infrastructure strategy is being developed which will set out a pathway to stay ahead of demand over the critical period out to 2030.
Additionally, recent Budgets have seen major changes to Motor Tax and VRT structures with the aim of incentivising the purchase of more efficient and 'greener' vehicles.
Budget 2021 saw the transition to the more accurate Worldwide Harmonized Light Vehicles Test Procedure (WLTP); and restructured the VRT and motor tax regimes with a view to strengthening their environmental rationale in line with Government commitments as set out in the Programme for Government and Climate Action Plan. The VRT rates were changed again in Budget 2022 to increase the fiscal gap between low emission vehicles and the rest, thus incentivising motorists in the market for a new car to make ‘greener choices’. The structure is based on the 'polluter pays' principles, with a reduced rate for battery electric vehicles (BEVs) and well-performing PHEVs of 7% of open-market selling price, while vehicles falling into the highest emissions band are liable to a rate of 41%. Similarly, in motor tax, WLTP-tested vehicles are charged motor tax according to their emissions profile; the rate for BEVs and well-performing PHEVs is €120 and scales up to €2400 for the most pollutant vehicles.
Furthermore, the emissions-based vehicle BIK regime will take effect from January 2023. This new system will provide a structural benefit to low emission vehicles such as PHEVs, where lower emission profiles will by reflected in lower rates for BIK liability.
I am satisfied that the current vehicle taxation regime is based on an environmental rationale which incentivises low emission vehicles, including well performing PHEVs, and consequently provides strong disincentives for the most polluting ones.
Question No. 392 answered with Question No. 385.
Question No. 393 answered with Question No. 385.