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.”
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.