Ireland's electric car buyers had been staring down the barrel of a rise in charging prices ahead of budget 2026, as the existing — discounted — nine per cent VAT rate on electricity supplies was due to run out on October 31st next. At that point, VAT on electricity would have risen to 13.5 per cent, which would have driven up EV charging prices, many of which have already been on the rise of late.
Is it good that this hasn't happened?
Yes, and it'll be with a sigh of electric driver relief that Minister for Finance Paschal Donohoe announced the retention of the existing nine per cent VAT on electricity up to the end of December 2030. While it won't be of any benefit in terms of cutting the costs of running an electric car, it does at least mean that prices won't be going up.
Other drivers — and car makers — will doubtless be relieved that the proposed weight-based tax for SUVs failed to materialise.
How much would EV charging costs have gone up?
That electricity price rise could have been significant. In terms of home charging, prices would have risen — for someone driving the best-selling EV in the country, the 77kWh model of the Volkswagen ID.4, by around €1 per charge, which, to be fair, most people could likely have absorbed. But public charging costs — already pricier than petrol for the three models we've used here as examples — would have been pushed even higher.
A return to 13.5 per cent VAT for public charging would have meant that the standard ESB e-Cars rate for 'slow' kerbside chargers, of between 7.4 and 22kW AC power, will rise from the current 59c to 61.4c per kWh, while using a 'fast' charger of between 50kW and 150kW on DC power will climb to 66.6c per kWh, and 'very fast' 150kW+ DC chargers will rise to 68.72c per kWh.
It means a full charge of the VW ID.4 on a kerbside 'slow' charger would have risen to €47.27, considerably more than you'd have to pay if you were running on petrol or diesel. For the Hyundai, that cost would have been €30, and for the Kia it would have risen to €36.22; again, both are in theory more expensive than an equivalent combustion-engined car for the same notional mileage.
For fast charging, in the VW, a 10-80 per cent charge, assuming you're using a 150kW charger, and the VAT change had gone through, would have cost you €35.89, for an estimated 315km of range (assuming that 450km real-world range figure). For the same distance, assuming once again average fuel economy of 5.0 litres per 100km in the most efficient diesel or hybrid cars, that would cost you €27.87 in petrol or €26.60 in diesel. For the Hyundai, the charging cost on a 150kW charger would have been €22.80, gaining you around 224km of range, which would, in theory, cost you €19.80 in petrol or €18.90 in diesel. For the Kia, the figures are €27 of charging for around 250km of range, which would cost you roughly €22.10 in petrol, or €21.12 in diesel.
Those fast-charging prices still remain high — although far from the most expensive country in Europe when it comes to EV charging, Irish electric car drivers pay, on average, €7.20 for each 100km of electric motoring, compared to just €2.90 in Iceland, or €3.20 in Portugal.
What other car-related measures were announced?
In other motoring-related measures, the per tonne cost of carbon taxation has risen from €63 to €71 which will add around 2-3c per litre to the cost of petrol and diesel, although Donohoe specifically said that money would not be ring-fenced for improvements in electric car charging, but would be spent instead on social welfare and on grants for green energy home conversions while Jack Chambers, Minister for public services, did say that some of the carbon tax money would go into improving electricity networks.
Chambers also allocated €4.7-billion to the Department of Transport, some of which will go to major road developments including the Adare bypass, the N5, and the M28 to the Port of Ringaskiddy in Cork.
The €5,000 VRT relief for EVs has been extended, but only for one year, up to the end of December 2026. Of the much-trailed change to a weight-based tax system for SUVs and increasingly heavy cars, there was no sign.
The Benefit In Kind relief, aimed at company car EV buyers, has been extended, and it will remain at a €10,000 off the value of an electric vehicle for BIK calculations up to the end of 2026, before it reduces to €5,000 in 2027, €2,500 in 2028, and it will be removed entirely in 2029. While that will come as unpleasant news to company car buyers and fleet managers, Donohoe did sweeten the pill a little by announcing the creation of a new, lowest BIK rate for zero-emissions vehicles — currently the lowest BIK band runs from 0g/km of CO2 up to 59g/km, and therefore also includes many petrol-engined plug-in hybrid models.
This new A1 BIK band will have rates of six per cent to 15 per cent, depending on the mileage accrued, while the lower mileage limit for business users in the highest mileage band is being permanently reduced from 52,001km to 48,001km, starting from January 1st. That means that more long-haul business drivers will be drawn into the lowest possible BIK rate if they're driving an EV.
Also on the business front, the accelerated capital allowance for businesses buying energy-efficient options for business assets — including vehicles — is being extended out to the end of 2020, which means companies investing in electric cars for their fleets will be able to write 100 per cent of the asset value of those vehicles off against tax in the first year of ownership.
Interestingly, there's also an accelerated capital allowance — that same 100 per cent value write-off — for companies investing in compressed natural gas, liquefied natural gas, biogas or hydrogen, and in refuelling equipment. Ireland currently has little-to-nothing in the way of a hydrogen fuelling infrastructure, in spite of manufacturers such as Toyota, Hyundai, BMW, and Renault still showing interest in developing new hydrogen vehicles. Will this capital allowance move the hydrogen dial in Ireland?
Finally, if you have an electric car with the ability to transmit power back to the national grid at times of peak demand — so called V2G, or Vehicle to Grid technology — then you'll pay no income tax on the first €400 worth of energy that you sell back to your supplier.