The Irish Electric Vehicle Owners’ Association has said it is “underwhelmed” by the inclusion of a benefit-in-kind tax incentive in the budget.
The association said the measure was a “niche” addition to the package of available incentives. .
Dave McCabe from the association said the “low level of incentive” taken with the recent decision that ESB Networks should divest itself of the electric vehicle charging networks, was unlikely to inspire many people to buy an electric vehicle.
Mr McCabe said the niche element of the measure is because it is more likely to affect company directors, than sales reps, and any take-up likely to be limited by the one year duration of the exemption.
The association said the amount of benefit-in-kind sales reps pay already starts to reduce as the mileage starts to climb.
Under 24,000km the benefit-in-kind is 30 per cent of the value of the car, while more than 48,001km it is down to 6 per cent of the value of the car.
A company director driving less than 24,000km in a company car that costs €60,000, would see a notional €18,000 added to his/ her salary for tax purposes. Typically, this would result in an additional tax cost of about €9,000 a year.
A sales rep driving a car that costs €45,000 and driving more than 48,001km a year would see a notional increase in his/ her salary for tax purposes of €6,300. At the higher rate of tax this would result in a cost of about €3,650 per year.
Mr McCabe said this meant any interest in the incentive would likely come from directors, and be in the more expensive electric vehicles such as Tesla, BMW and Volkswagen models.
Overall, Mr McCabe said the budget measure had left the association “underwhelmed”.
He also noted the Commission for Regulation of Utilities (CRU), had “washed its hands ” of the charging network at a time when the Government is moving to incentivise ownership.
Last weekend, the CRU said ESB Networks should not spend any more money on the charging system and in advance of a sale should get money to run it from users or government subsidy.
Mr McCabe said there was a range of “reasonable incentives such as a €5,000 SEAI grant, a €5,000 VRT reduction and low annual road tax.
But he said if charges were brought in which made small diesel cars more cost effective, people would probably not bother with electric vehicles.
