Catherine Callaghan (Carlow-Kilkenny, Fine Gael)
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8. To ask the Minister for Finance his views on how taxation measures could help arrest the decline in the uptake of electric vehicles; and if he will make a statement on the matter. [16104/25]

Catherine Callaghan (Carlow-Kilkenny, Fine Gael)
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Will the Minister give his views on how taxation measures could help arrest the decline in the update of electric vehicles?

Paschal Donohoe (Dublin Central, Fine Gael)
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The existing vehicle tax structures in the State have a strong environmental rationale, with the more pollutant, fossil-fuelled cars paying higher rates of tax, between motor tax, benefit in kind, BIK, vehicle registration tax, VRT, and the nitrogen oxide, NOx, charge. In contrast, low-emission cars and electric vehicles, EVs, are subject to lower rates of tax. I know the Deputy will be aware of it but it I want to emphasise the point that our tax code already recognises the differing contributions that those vehicles make to carbon emissions in our economy and society. The current policy approach aims to incentivise the uptake of zero- to low-emission vehicles, which will help to reduce Ireland’s transport emissions.

A number of tax measures are in place to support the uptake of EVs, including preferential rates of BIK; BIK tapering relief of €35,000 in 2025 to €10,000 in 2027; a BIK exemption where an employer provides a facility for the charging of an EV; VRT relief of up to €5,000; and the introduction of an emissions-based VRT system for light commercial vehicles that will apply from 1 July 2025 in the Finance Act 2024. Other measures are in place such that EVs also benefit from low rates of annual motor tax. New proposals are considered and current vehicle tax policies are kept under review as part of the tax strategy group which is the transparent process we have in place to advise myself and the Government on the taxation options that are available to the Government in advance of the budget, the policy merits and demerits and what the costs of those options would be.

Catherine Callaghan (Carlow-Kilkenny, Fine Gael)
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I thank the Minister for his response. I have been an EV driver since 2015, a so-called early adopter, and I am on my third EV. When I purchased my first EV, there were a number of incentives such as the SEAI grant that covered the entire cost of the charger. That has been greatly reduced in the intervening years. There was also free public charging and low road tax, as the Minister mentioned, as well. I realise that free public charging was not sustainable in the long run but combined with the grant that covered the full cost of the home charger, it made the transition to the EV much easier for me and my family. While I appreciate the measures the Minister mentioned, which go a long way to supporting the transition to EV driving, will he share his thoughts on increasing the home charger grant and reducing the current rate of road tax at €120 annually, which is the same as it was when I started driving an EV more than ten years ago?

Paschal Donohoe (Dublin Central, Fine Gael)
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I appreciate the case the Deputy is making for the further support of EVs. It is interesting to see the growth that has taken place and I hope it will continue in the coming years as EV technology improves and as we do a better job of rolling out the charging network needed to facilitate those who use EVs. We have made reasonable progress but it is very obvious that we need to do even more, particularly in some cities, as Deputy Gogarty raised with me last week. I have outlined the different measures in place.

I will of course consider whether any further steps are needed, and I thank the Deputy for raising this. I have to remind the Dáil again that this is all subject to budget decisions. All of these options will have costs and we have look in the round at all the decisions we make in budget 2026. I thank the Deputy for acknowledging the measures that are in place, particularly with regard to motor tax. I know the Deputy wants this to go lower but all these things will be considered in October.

Catherine Callaghan (Carlow-Kilkenny, Fine Gael)
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I thank the Minister and acknowledge the measures that have been implemented. A lot is often made of the insufficiency of the public charging network. I do not share that criticism myself because I have a home charger and rely solely on that. The Government decision to reduce VAT to 0% on solar installations in 2023 was hugely beneficial to my family and others like mine. It allowed us to invest in solar PV panels, which marries very well with EV driving. I am a strong advocate for EV driving and would like to encourage more people to make the switch. In light of the high input costs of a new EV, does the Minister see any possibility in the current upper limit for VRT reduction being increased? I recently purchased a second-hand EV for the first time. What is his view on introducing some tax measures specifically for second-hand EVs, allowing first-time buyers of second-hand EVs to also receive a grant towards the purchase and installation of a home charger among other things?

Paschal Donohoe (Dublin Central, Fine Gael)
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I will certainly take on board what the Deputy said and make sure officials in the Department consider it. I am not doubting for a single moment the impact of the various measures she has suggested or what they could do to enhance the further take-up of EVs. We will certainly consider all of that in the coming weeks and months. I do, however, need to relate it back to the broader environment we are in, which she very well understands. We are at a point at which we are seeing a very big change take place in the economy of the world, which will have effects here in Ireland. We need to ensure that any changes we make in the tax code are affordable and, in particular, support jobs and enterprise in Ireland. I will offer that as the general point. In truth, a lot of the individual measures the Deputy has raised would not be huge budgetary items. However, in the round, pulling all of these things together sometimes has a big cost. I assure her that I will certainly consider the issues she has raised and see what more could be done to support the roll-out of EVs in Ireland.