Donal Hickey: What will the government do when we all switch to electric cars

Donal Hickey: What will the government do when we all switch to electric cars

Politicians often mention the importance of listening to the so-called man, or woman, on the street as a barometer of how people are thinking. Opinion polls are not always needed.

The other day, I was buttonholed on the street by a man who was clearly bothered by just one issue: “What’s the Government going to do for tax revenue (from vehicle fuel) if everyone switches to electric cars?,’’ he asked.

At present, motorists are paying around 60% tax on petrol and diesel at the pumps. If the target of having one million electric vehicles (EVs) on our roads by 2030 is reached, the state’s coffers stand to lose €1.5bn in takings from motor tax, VAT and fuel tax, according to a Department of Finance review paper.

The paper also mentions “significant Exchequer revenue risk’’ due to the electrification of the national fleet. A query to the department elicited a reply in that vein, mentioning a long-term risk to tax inflows from the necessary move away from fossil fuels.

But the mandarins are thinking all the time. A department spokesperson said there’s an ongoing process of research and analysis on how best to manage the transition. In other words, they’ll find alternative sources of taxation.

Meanwhile, sales of EVs continue to grow. New EV and hybrid vehicle purchases accounted for 33% of car sales in the first five months of this year, compared to 19% in the same period last year.

At present, there are about 45,000 EVs on our roads. The change is certainly underway, with car dealers reporting more and more calls from likely purchasers.

These cars are currently more expensive to buy than petrol or diesel models. Experts, how

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