Car

three company employees, two of who have already opted out of their company car scheme this year, while the third told me that while he is continuing with his company car for now, it no longer makes financial sense for him to do so and he is looking at his options for 2024 when his lease is up and the temporary OMV reduction is due to lapse.

Of the two who opted out, both have exchanged their company cars for older models, with one purchasing a seven year old Škoda Octavia diesel to replace his previous one year old company diesel.

Others have stated that while they are open to the idea of going electric, there just isn’t the availability of suitable cars within their price brackets, while the issue of range and public charging limitations remains a factor particularly for those covering longer distances.

Even those thinking of opting out of a company car scheme to buy an electric car privately will have been disincentivised by the announcement that the Government is reducing the SEAI administered grant offered on such vehicles from €5,000 to €3,500 from July. Though in fairness, if the money saved from this grant reduction is, as mooted, instead ploughed into developing an improved charging infrastructure, that may prove to be a benefit for the greater good in the long term.

Given that the Government is actively looking at plans to reduce private car usage, you would also have to question the logic of continuing to include business mileage as a factor in calculating BIK rates so that the greater distances you cover, the less BIK you pay. Agreed, having company cars parked up doesn’t make huge business sense, but when you hear anecdotal stories of drivers taking elongated routes to destinations just to bring their mileage up to the next (lower) tax threshold, or, for the same reason, opting to use their car on journeys across town when alternative transport is readily available, this policy seems rather counterintuitive. Surely at a time when the Government is encouraging people to get out of their cars and do more journeys via public transport and other means, offering incentives to use your car unnecessarily should be the last thing it is doing?

And of course there is a third element to the mixed messaging coming from Government. While diesel is increasingly portrayed as the devil incarnate fuel, it remains the only energy source that the Government offers VAT rebates on to business users. Drive a modern clean petrol or hybrid car and you pay full prices at the fuel pumps. But rock up in a 20 year old Euro 3 diesel and as long as you are VAT registered you can claim the 23% tax back on your business mileage…..go figure.

It’s so obvious that it shouldn’t even need saying, but offering business users genuine incentives to switch to electric company cars is one of the quickest and most effective ways to increase our EV carpark. Not least because those same new EVs will, in a couple of years, feed down into the used car market where currently there is a severe shortage of product for people looking to move into affordable electric motoring.

In carrot and stick terms, the Government’s company car strategy for moving to green vehicles seems to be one of offering a very small carrot while wielding a rather limp stick. A rethink of current policy is urgently required.

Doyle - cathal@fleet.ie