Lisa Lokasto

The incentives look grent but the long term financial reality could be different.

Lately you’ll have seen a wave of car ads pushing electric vehicles (EVs). Should every company director in Ireland be rushing out to buy a brand new EV through their company?

0% finance, free holidays, free wallboxes, lower running costs, green credentials, and great tax savings?

Well maybe not. When you strip out the flashy marketing and look at the numbers, in many cases EVs are far less attractive than people expect.

Let’s break it down.

EV Incentives Are Shiny, But the Long-Term Risks Are Significant

0% finance or a holiday thrown in is a sales tactic. It doesn’t change:

• The purchase price
• The depreciation
• The long-term repair risk
• The lack of VAT recovery
• The BIK exposure after 2025
• The limited capital allowances

A €60,000 EV financed at 0% is still a €60,000 EV and from a company’s perspective, that’s a lot of capital tied up in a non productive asset.

Garages are already warning about repairs and parts

This is where the reality of EVs starts to kick in.

• Battery-related issues outside warranty can cost five figures
• High voltage system failures require specialist skills (and that’s going to cost you)
• Independent garages can’t handle many EV repairs.
• Parts delays for certain EV brands can be months!
• Insurance companies increasingly write off EVs as uneconomic repair.

This has to be factored up against the 0% finance brochure.

resale value is uncertain

EV technology is evolving rapidly, and this pace of change has a direct impact on resale values. Within just four years, an EV can feel outdated compared to newer models with improved range, faster charging, and more advanced software. When you buy a new EV, you can typically expect a general warranty of about five years and battery coverage of around seven to eight years (or 150,000–160,000 km), but these warranties do not protect against rapid depreciation.

At the same time, tax incentives for EVs are tapering off, reducing the financial supports that once helped stabilise used prices. As a result, future resale values have become increasingly difficult to predict.

The Tax Incentives Are Narrow & misunderstood

VRT relief is only up to €50k and gone after 2026 Battery EVs qualify for: Up to €5,000 VRT relief under €40k OMSPb Tapered relief €40k–€50k No relief above €50k Scheme ends 31 December 2026 (unless extended)

BIK relief is good now, falling fast BIK on EVs used to be great but it’s tapering off. In 2025, directors can still avoid BIK on EVs with OMV under €45,000. In 2026, relief drops sharply and by 2027, BIK will rise again. By 2028, many EVs will carry a meaningful BIK charge

Charging incentives — narrow and conditional Workplace charging can be BIK free, but only if all employees have access Home charger grants go to individuals, not companies Public charging reimbursement involves messy apportionment of business vs private use

From 1 January 2025 there is a BIK exemption where the employer installs and retains ownership of a BEV home charger at a director/employee’s residence, subject to conditions. That’s helpful on the income tax side but it still doesn’t solve the VAT issues….

VAT: The Most Misunderstood Cost in Company EV Purchases

This is the area where most directors are caught off guard.

The default rule: NO VAT recovery on a passenger cars! (except in specific trades like car hire, driving schools, etc.)

Doesn’t matter that it’s and EV with:

• Zero-emission
• Environmentally friendly
• Used for business
• Bought by a company
• Financed at 0%

It’s still a passenger car, and VAT recovery is generally prohibited.

There is an exception to this rule and it’s narrow;

If the EV qualifies as a “qualifying passenger motor vehicle”, VAT recovery is limited to:

• 20% of the VAT paid;
• and only if business use is 60% or more;
• and you must be able to demonstrate that business-use percentage to Revenue (with records)

VAT on charging?

• Home charging: almost never VAT-recoverable
• Workplace charging: partial VAT recovery only
• Public charging: VAT reclaim depends on proper invoices and business/private splits

Many directors assume that if the company reimburses them for electricity used to charge a company EV at home, the company can reclaim the VAT on that electricity.

• In almost all cases, it cannot.

For VAT to be recoverable:

• The company must be the purchaser,
• The invoice must be addressed to the company, and
• The electricity must be used for business purposes.

With home charging the company cannot reclaim VAT on home electricity, even if it reimburses the employee for business miles. Directors cannot apportion their home electricity bill for VAT.

Revenue do now allow tax free reimbursement of home electricity costs for an employer provided EV (with proper evidence), and BIK relief for employer installed home chargers, but none of that changes the VAT problem: the company still generally can’t reclaim VAT on domestic electricity.

In theory, VAT recovery could be considered if the the company puts the home electricity account in its own name and then charges BIK to the director but this is not tax efficient or practical. Home charging is usually treated like mileage reimbursement i.e.  not a VATable supply

Accelerated Capital Allowances (ACA)

Many dealership sales pitches mention “100% write-off in year one” because EVs qualify for the Accelerated Capital Allowances.

Passenger cars, including electric ones, are capped at €24,000.

That means that for a €60,000 EV the allowable amount for CAs is €24,000 and €36k your company never gets any tax deduction for.

bottom line

I’m by no means anti EV, but company EVs often look better on Ads. Costs that are usually underestimated and Incentives that are overrated

So Should a Company Buy a New EV in 2025?

For some businesses, particularly those buying mid-range EVs under €40k–€45k and swapping every 2–3 year, the numbers can still work but for premium EVs, the financial logic breaks down.

Revenue aren’t about a personal luxury being put through the company, the tax system claws back value through

• BIK,
• VAT restrictions,
• Capital allowance caps, and
• Depreciation risk

Don’t sign a 0% finance deal or lock your company into a €60k+ EV without a proper financial check. One consultation may save you thousands.
Get in touch to book.

-Lisa