Ireland’s EV community went into this year’s Budget with one big worry, higher charging prices. The reduced 9% VAT rate on electricity was due to expire at the end of October, which would have seen VAT jump back to 13.5%. With charging costs already climbing, drivers feared yet another increase was just around the corner.

Relief for EV Drivers

In some good news, Minister for Finance Paschal Donohoe confirmed that the 9% VAT rate on electricity will remain in place until the end of 2030. While it doesn’t cut costs, it does prevent an immediate price hike, and that stability will come as welcome relief to electric car owners.

Petrol and Diesel Get More Expensive

It’s not all good news for motorists, though. The carbon tax has risen from €63 to €71 per tonne, which means an extra 2–3 cent per litre at the pump for petrol and diesel drivers. The revenue won’t be ring-fenced for EV infrastructure, but it will help fund social welfare supports and home energy upgrade schemes. Minister Jack Chambers did, however, note that some of the funds will support improvements to Ireland’s electricity grid.

EV Grants and Reliefs Extended

The €5,000 Vehicle Registration Tax (VRT) relief for new EVs will continue, but only until the end of 2026. After that, it’s uncertain what level of support will remain in place.

For company car drivers, there’s mixed news. The Benefit-in-Kind (BIK) relief has been extended, keeping a €10,000 discount on the taxable value of EVs until the end of 2026. From there it will taper down, to €5,000 in 2027, €2,500 in 2028, before being removed entirely in 2029. To soften the blow, a new BIK band has been created exclusively for zero-emission vehicles, separating them from plug-in hybrids that were previously grouped in the same bracket.

Support for Businesses

On the business side, the Accelerated Capital Allowance scheme has been extended to 2030. This allows companies investing in energy-efficient assets, including EVs, to write off 100% of the purchase price against tax in the first year. For fleets considering electrification, this remains a powerful incentive.

New Perks for Vehicle-to-Grid Drivers

Finally, there’s a small but significant perk for drivers using Vehicle-to-Grid (V2G) technology. If your EV can send electricity back to the grid during peak demand, you won’t pay income tax on the first €400 worth of energy you sell back to your supplier.

The Bottom Line

The 2026 Budget won’t transform the EV landscape overnight, but it does provide stability where it matters, electricity VAT rates, extended grants, and continued business incentives. While rising fuel taxes put more pressure on combustion drivers, electric mobility in Ireland remains on track for steady growth.