Volkswagen Group Ireland Ltd Budget 2022 response

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

As the country’s leading provider of battery electric vehicles with a 38% market share, we believe this decision provides consumers with the clarity needed to make important vehicle purchase decisions.

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.”

Globally, Volkswagen Group plans to have a CO2 neutral footprint by 2050, if not before. In order to do this, it plans to launch 70 fully electric models plus an additional 60 hybrid models by 2030. Production of 20 all-electric vehicles and 30 hybrids has already commenced. By 2030, the battery electric vehicle (BEV) share of new car fleet for the Volkswagen Group will increase to 60% in Europe and 50% worldwide.

While the Group is fully committed to leading the switch to all-electric vehicles, it also understands the importance of low-emitting, fossil-fuelled vehicles in the interim period.

From January 2022, the revised VRT system will increase the rate of tax on certain internal combustion engine vehicles, beginning with a 1% increase for vehicles in bands 9 to 12; 2% for bands 13 to 15; and a 4% increase for bands 16 to 20.

Under the new system, the price of an Audi Q3 35 TDI 150 SE will increase by €1,030 from €44,850 to €45,880. The price of a ŠKODA Octavia Style 1.0TSI 110HP will go up €305 to €29,055 while the price of a Karoq Style 2.0TDI 115HP will increase €777 to €36,452.
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.”