If we want Ireland to go electric, it is vital we get balance into how we tax cars

Published on 29 September, 2021

The barrage of opposition to proposals that would increase the price of EVs and lower-emission cars continues apace with the country’s biggest-selling group predicting dire consequences.

The Volkswagen Group (VW, Audi, Seat and Skoda) claims to be the country’s biggest seller of battery electric vehicles (BEVs) and internal combustion engined (ICE) cars.

Overview

The barrage of opposition to proposals that would increase the price of EVs and lower-emission cars continues apace with the country’s biggest-selling group predicting dire consequences.

The Volkswagen Group (VW, Audi, Seat and Skoda) claims to be the country’s biggest seller of battery electric vehicles (BEVs) and internal combustion engined (ICE) cars.

It says that instead of boosting uptake of EVs as well as newer, cleaner ICEs to meet emissions targets, the proposals for government by its Tax Strategy Group (TSG) will increase prices of low and zero-emission cars and encourage motorists to hold on to older, higher emitting vehicles.

The group has already forecast that the price of an electric ID.3 would increase by €2,926 if the think tank’s proposals were adopted. As such they would have a negative impact on long-term climate goals.

The changes would abolish the rebate of up to €5,000 for BEVs costing more than €40,000 and hit those priced from €30,000.

In a statement yesterday, the Group, reiterated: “If adopted, these measures would eliminate incentives for the vast majority of electric cars.”

The Volkswagen ID.3 and ID.4 account for 33pc of EV sales so far this year.

Brand director Rodolfo Calixto said: “For the second successive year the government seeks to increase the level of VRT on new cars, including fully-electric vehicles, despite ignoring the industry’s advice to replace the current ageing fleet of vehicles with battery electric vehicles and newer lower emitting combustion engine vehicles.”

Comment

Deep in the footnote of the SIMI’s recent statement about car prices rising if TSG proposals are adopted were two simple facts.

One said there are 2.2 million cars on the road; the other informed us that EVs make up just 1pc of that number.

I know you can argue that it is still early days into the Government’s plan to have nearly one million EVs on the road by 2030. But it is not still early days, really, and the figures are shockingly low.

And the years are flying, so we are at a delicate balancing point between trying to encourage people to buy an EV and to discourage use of internal combustion engines (ICEs).

The only problem is money. The TSG report makes no bones about the need to compensate for tax income that will be lost as the number of ICE sales declines.

The report highlights the scale of the proposed “electrification” of the national car fleet and claims it will entail significant Exchequer “revenue risk”.

It says: “The State relies on the purchase/acquisition and fuel usage of internal combustion engine (ICE) vehicles to raise substantial revenues every year.

“It is estimated that if the Climate Action Plan 2030 EV target is achieved, the Exchequer will lose approximately €1.5bn worth of revenue annually from motor tax, VAT and fuel excise.”

No right thinking government is going to let that sort of money slip away.

Someone has to pay. But it seems unfair to heavily charge those who are trying to buy lower emission cars or full electric vehicles.

It needs to be done judiciously or else it will distort the good intent of so many and not be regarded as fair.

New Lexus NX on sale in January, but here for viewing next month

The new Lexus NX – the brand’s mid-size SUV – goes on sale in January, but can be previewed in retailers next month by potential buyers.

The luxury brand says the car (pictured) is 95pc new and different from the current model.

Lexus lists new elements under several headings. They include new design, powertrains, connectivity, safety and convenience technologies.

It also claims it drives and handles ‘comprehensively’ better.

One of the more significant elements is the introduction of a first plug-in hybrid electric model, the NX 450h+.

Alongside that, Lexus claims “significant performance and efficiency gains” in the new NX 350h, which has fourth-generation hybrid electric technology.

Also debuting in the NX is a new multimedia platform the maker claims is a huge advance in the area.

There is also an expanded Lexus Safety System + that incorporates active safety and driver assistance systems designed to avert a wider range of accident risks.

Changing Trends

The mood is shifting quickly when you learn that electric cars and plug-in hybrids out-sold diesels across Europe last month.

Despite the chip shortage affecting sales, the Dacia Sandero again took top spot as the most-registered car, according to data for 26 European markets.

Overall, new-car registrations slowed again in August. Part of the explanation for the lowest recorded volume in seven years is the chip shortage, experts say.

Felipe Munoz, global analyst at JATO Dynamics, said: “The chip shortage has been a major setback for OEMs still grappling with the effects of the pandemic.”

Despite that, sales of EVs and plug-in hybrids continued to grow. Last month saw the second-highest market share at 21pc – a level that outstripped diesels by 10,000 cars.

Demand was particularly strong for EV versions of the Fiat 500, Peugeot 208, Hyundai Kona, Opel Corsa, VW ID.3 and Kia Niro.