New car sales plummet again in May
Budget 2022 has some implications for motorists

Budget 2022 contains a number of measures specific to motoring:

Vehicle Registration Tax

  • From January 2022 a revised vehicle registration tax table is being introduced. The 20 band table will remain with an uplift in rates beginning with a 1% increase for vehicles that fall between bands 9-12; 2% for bands 13-15; and then a 4% increase for bands 16-20.
  • The €5,000 relief for Battery Electric Vehicles is being extended to the end of 2023.

Extension of BIK exemption for EVs

  • The BIK exemption for battery electric vehicles will be extended out to 2025 with a tapering effect on the vehicle value. This measure will take effect from 2023. For BIK purposes, the original market value of an electric vehicle will be reduced by €35,000 for 2023; €20,000 for 2024; and €10,000 for 2025.


  • The Accelerated Capital Allowance scheme is also being extended and amended to include hydrogen fuel vehicles and Refuelling Equipment.


The cost of petrol and diesel at the pump will rise by approximately 2.1c and 2.5c per litre. It means that the average price of a full 60-litre tank of diesel will increase by €1.48, while the price of a full 60-litre tank of petrol will rise by €1.28.

Commenting on Budget 2022, SIMI Director General Brian Cooke:

“Budget 2022 is a mixed bag for the Motor Industry and the motorist. The increases in VRT on the back of COVID, Brexit, increased fuel taxes and the dramatic VRT changes in last year’s Budget are hugely disappointing. These increases only add to the already heavy tax burden on new cars, and will serve to slow down the renewal of the fleet, acting as a barrier to reducing emissions.

The SIMI welcomes the continuation of VRT relief for Electric Vehicles out to 2023. This brings a degree of certainty to both consumers and the Industry on the vital Electric Vehicle Project and will help increase EV sales over the next two years. The 0% Benefit-In-Kind (BIK) has proved a real success in encouraging EV sales, and while its extension is positive, the tapering of this relief is too early, and should not commence until after 2025.”

Volkswagen Group Ireland welcomes the Government’s decision to extend Vehicle Registration Tax (VRT) relief on electric vehicles to the end of 2023.

Carla Wentzel, Group Managing Director, said:

“Registrations of new electric vehicles are up 115% year-to-date. The Irish car buying public has shown its eagerness to transition away from fossil fuels and towards more sustainable modes of transport. As a Group, we believe incentivising electric vehicle uptake stimulates replenishment of the fleet and is the best route towards a cleaner, greener environment.”

John Donegan, Brand Director, ŠKODA Ireland, has “mixed” views of this year’s Budget. He said:

“The continuation of incentives and supports for electric vehicles is welcome. However, the increase of VRT is counterproductive. The Volkswagen Group has a clear plan that shows its commitment to the Paris Climate Agreement. Meeting the targets of the Climate Action Plan involves replenishing the current and older fossil-fuelled vehicle fleet with newer and cleaner petrol, diesel, plug-in hybrid and electric vehicles. The introduction of further increases to the VRT on petrol and diesel engines is premature and counterproductive to fleet renewal. Until electric vehicles can be supplied in greater volumes, the focus should be on reducing overall emissions rather than penalising Irish motorists.”