Brian Leddin (Limerick City, Green Party)
Link to this: Individually | In context | Oireachtas source

7. To ask the Minister for Transport, Tourism and Sport if he will develop plans to target electric vehicle, EV, grants towards lighter, smaller vehicles to encourage a market for the types of electric vehicles frequently observed in other European cities, which are generally priced lower than the €14,000 threshold that is set for eligibility for grants in Ireland, with a view to ensuring that the new vehicle fleet is as efficient as possible and less of a safety risk to pedestrians and cyclists than heavier sport utility vehicles, SUVs; and if he will make a statement on the matter. [20804/23]

Brian Leddin (Limerick City, Green Party)
Link to this: Individually | In context | Oireachtas source

I ask the Minister if he will develop plans to target electric vehicle grants towards lighter and smaller vehicles to encourage the market for the types of electric vehicles that one frequently sees in other European cities. These are generally priced lower than the €14,000 threshold that is set for eligibility for grants in Ireland. This would all be with a view to ensuring that the new vehicle fleet is as efficient as possible and less of a safety risk to pedestrians and cyclists than the heavier SUVs. I ask the Minister to make a statement on the matter.

Eamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context | Oireachtas source

The Government has already committed significant funding to support low-emitting vehicles through the national development plan, which currently includes an allocation of almost €500 million for the period from 2021 to 2025 and additional support from the climate action fund.

This funding includes both capital grants to support the purchase of EVs and capital funding for the delivery of EV charging infrastructure.

Further funding has been allocated in 2023 to ensure the continued transition to EVs. This underpins the Government’s commitment to making EVs accessible to all. This funding will continue to incentivise the switch to electric vehicles as well as enabling the expansion of a fast and rapid electric vehicle charging network to stay ahead of demand.

There are currently almost 85,000 EVs registered on Irish roads as of the end of January. That number is expected to increase as the price of EVs continue to fall relative to their combustion engine equivalents. It is expected that as manufacturers ramp up EV production, costs will become more comparable to traditional combustion engine cars within the next number of years, which will make the total ownership much more attractive and competitive, particularly given fuel prices trends.

A number of new vehicles entered the market last year with a trend towards smaller and mid-size family cars. An additional number of new market entrants are expected to further expand the availability of more affordable EVs starting this year. Further affordable segment models are expected to be announced as new EV focused manufacturers enter the European market.

Our EV incentive system is weighted towards the lower cost and smaller end of the market. An EV purchase grant award is available to vehicles with a maximum cost of €60,000. This grant has been reduced to €35,000 from July this year. There is a further generous vehicle registration tax, VRT, rebate available to EVs, with the maximum amount available to vehicles costing less than €40,000, and no VRT relief available to vehicles costing more than €50,000.

As per the terms and conditions of the EV grant programme, privately purchased vehicles of category M1, that is, passenger vehicles with no more than eight seats in addition to the driver's seat, with a retail price of €14,000 or above, are eligible for grant support. Any privately purchased M1 category vehicles with a retail price of below €14,000 are currently not eligible to receive grant payments.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

I thank the Minister. He will get an opportunity to come back in.

Brian Leddin (Limerick City, Green Party)
Link to this: Individually | In context | Oireachtas source

What we are seeing that the moment is the transition of our vehicle fleet from a smaller mid-size vehicle fleet to one comprising large vehicles particularly. SUVs are being sold at an alarming rate. Many of those are electric vehicles. The policy needs to evolve such that we are heavily supporting the smaller and lighter vehicles over the heavier SUV-type vehicles. The reason to do this is not only do those smaller and lighter vehicles make more sense in our urban areas where there is limited space and they are safer for pedestrians and cyclists but there is a significant climate benefit as well. A heavier EV still uses a lot of fossil fuels. At the moment, we are at 60% fossil fuels; even in 2030, we will still be at 20%. There is, therefore, a climate reason to do this.

Eamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context | Oireachtas source

I agree with the broad thrust of what the Deputy is saying whereby 50% of the vehicles being sold in the current market are typically characterised as SUVs. They are larger, have a bigger environmental footprint and contain a greater amount of steel. There are concerns around safety for pedestrians and others. If a person is hit by an SUV versus a lighter and smaller car, there are real implications to that. Therefore, I absolutely agree that our strategy should be towards moving to lighter vehicles.

I would also argue for a move towards more car sharing rather than outright car ownership because most of our cars are parked for 95% of the time. There would be real efficiencies as well as cost savings for the public if we can incentivise and support that, which we will do through further measures.

I will continue my discussions with the Ministers for Finance, and Public Expenditure, National Development Plan Delivery and Reform to examine the various tax and other incentive systems we have. They are evolving and have changed quite significantly in the past two years in terms of which cars are eligible for the VRT rebate. We will continue to review and evolve this towards moving to a more sustainable transport fleet.

Brian Leddin (Limerick City, Green Party)
Link to this: Individually | In context | Oireachtas source

Colleagues and I from the Joint Committee on Environment and Climate Action travelled to Amsterdam two weeks ago. We saw how these smaller, dinkier type vehicles are quite prevalent in cities similar to Amsterdam. I had previously seen them in Rome. From conversations I have had with my colleagues on the committee, I think there is a cross-party appetite to go in this direction. Everybody recognises now that we do not want our cities full of SUVs even if they are electric. I ask the Minister to explore this further with the aforementioned Ministers. I would like to think there will be support across the Houses for an approach that will see a smaller and lighter vehicle fleet coming into being ahead of heavier and larger vehicles.

Eamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context | Oireachtas source

The other thing that will help in that direction is that the market itself is changing. A large number of the international manufacturers in Europe and beyond are starting to provide options that are cheaper, lighter and more compact. I believe there is a real market for that.

Many people say they cannot switch to electric vehicles because of the cost issue. That will start to be resolved as many those smaller, more affordable and more sustainable vehicles come on the market. That will also help us in terms of whatever support measures we put in place. We will know there is a lighter, cheaper alternative, which is what we want to promote.