Dr. Aoife O'Grady:

An incremental approach has been taken in budget 2022. For example, one change that was introduced is that the VRT rate for zero-emitting vehicles did not increase but an incremental increase was brought up based on vehicle weight. The 20-band table was introduced last year, going from the lowest to highest emitting. From this year there is a 1% increase in VRT for vehicles in bands 9 to 12, a 2% increase for vehicles in bands 13 to 15 and a 4% increase in bands 16 to 20. That is not specifically targeted at SUVs as a vehicle in terms of weight but it does introduce an increased rate of taxation being paid on the more heavily emitting vehicles in the fleet.

The electric vehicle policy pathway report was published in September last year. That was produced by a working group across Departments. One of its key recommendations is that the Government continues to assess the taxation and regulations that might be introduced to incentivise electric vehicles across the fleet. That group will reconvene this month. One of its key actions will be to consider what further taxation or regulations might be introduced in future budgets over the rest of the decade.

As I said earlier, the range of EVs coming on the market is quite significant now. The larger range vehicles of 500 km to 600 km will attract over a lot of people who might have been interested in purchasing the larger, heavier SUVs. I would point out that our EV sales are where we need them to be now. We did very well in 2021. Although the pathway to 1 million electric vehicles is significant and highly ambitious, we are not expecting to do a straight line trajectory from where we are now at a low base of about 43,000 vehicles up to 1 million. We expect a slower start to increase in the next few years and that by the end of the decade we will reach a point where we expect 100% of the vehicles in the fleet will be electric. The Department is comfortable that the sales of EVs are where they need to be. We were very happy with the uptick in sales last year. There was a very significant increase, 127%, in grant applications to the SEAI on the previous year. While we understand that there may be a slight slow down in all vehicle sales next year because of global supply chain issues we envisage that the increased sales of EVs will continue year-on-year up to the end of the decade.