Irish Government Vs Tesla Electric Cars

The 2018 Budget was one of the worst to date for me, Having purchased a second hand Tesla Model S from the UK a month before the budget when Government did a complete 180 degree on their promises to support Electric vehicles and stuck their fingers up to the less than 100 Entrepreneurs and early adopters that took up the government on their electric car promises – a small number of people to decide to kick in the teeth.

My company, Zatori, had put a Green 20/20 plan in place – in line with both my personal beliefs on climate change and being aware of the Carbon Tax targets set by the EU which Ireland was woefully off meeting and is going to cost the Irish people a huge amount of money – something people don’t seem to be talking about nearly enough. The plan had been to fully solar panel the roof of our 10,000 square foot office roof and run the electric car off grid. Following the governments U-Turn this financial plan has been scrapped to pay for their U-turn.

The Dail and government seems to be completely missing the point about why going back on their word is completely unreasonable and unjust. The assumption is that all cars were bought brand new and that all families can handle a drop in income of €24,000 – €33,000 per year. Maybe if your on a government salary and their special perks, but I don’t know many families that have that sort of disposable annual cash put aside incase our leaders put their hands in our citizens pockets.

To be honest, I was quite happy with my (polluting) diesel two seater commercial which was really only ever used to go to and from offices. It had very low BIK (5%) and cost little to run. I have a kid now, so there was a discussion on buying a second car for very very very occasional use. If you need to run to the hospital as we did recently, taxi’s just weren’t optimum.

We had been using gocars which are great, but the bigger the baby got, putting in the car seat every time got me thinking a car with more space and a car seat would be useful. Saying that we used the go cars about once a month, and buying a car for 12 trips a year seemed excessive. So It was suggested to me to look at an Electric Car that could do the job of two cars and had the added benefit of being able to pick up clients at the Airport which i couldn’t do in the van.

Electric vehicles are still very much in Early adopter stage. The charging network is woefully inadequate. In Ireland Electric Vehicles are only 0.47% of cars sold, in the UK the figure is 2% (400% more) and in Norway it is 48% of all cars sold (10,000% more)!

I ran the numbers and it seems like a great incentive in place. I could purchase a car that was depreciated 50%+ of its original value in the UK, bring it into Ireland with €5,500 VRT.

So why a Tesla?

Surely their are cheaper options – or so the political say. Their argument sounds good on the surface, if you can afford a brand new, top of the range car – with the €30,000 Ludicrous model upgrade then “you should be able to afford the tax”. In reality very few Tesla’s in Ireland have ludicrous mode option, it is as the name suggests, unnecessary and ludicrous. But many Tesla’s were brought in from the UK second hand and bought by entrepreneurs through their company. Its probably a group of less than 100 vast majority being Entrepreneurs / job creators according to the Tesla Owners Club on Facebook.

Regardless decisions were made give the promises in place, decisions that certainly would not have been made if those incentives were not present.

Range anxiety is the main barrier to electric cars. For me I’ve a 250 km per day distance between the office I work in most days and our Head quarters in Laois. So the only option was a Tesla with a big battery pack. Not the biggest but the 90KW version and certainly I didnt need the ludacris mode.

There is nothing worse for EV sales than potential business users foreseeing the following event as happened to me recently. Going on a 500k business trip to Galway from Dublin and back in a day, finding out that the Charge points were both used and having to wait for an hour for them to free up and another 2.5 hours for the car to charge enough to get back. Lets just say the baby sitter wasn’t happy. Compared to the UK our charging infrastructure is poor and now that Tesla’s have been made less achievable for the users of the roads who produce the most mileage and hence pollution, investment by Tesla in Superchargers is highly likely to drop off a cliff in line with their sales.

So in August I made a list and checked the numbers twice, listened to TD’s talk about how they plan to continue to support Electric Vehicles and took the plunge – sold the one polluting commercial van and replaced it with a lovely Electric Vehicle. For 4 weeks i felt great about it, I was doing my bit for the environment. Couldnt wait to start charging solely off Solar when we implemented the next phase of our go green plan.

Then the budget came out and singled out one group – the only EV currently in the market for over 50k was Tesla’s. The only EV suitable for executives or anyone who travels long distances is a Tesla. But Entrepreneurs count for few election votes.

I emailed the Local TD in the region where my company is based and explained the situation and that i thought it was completely unjust. This is essentially the role, as I see it, of a local TD, to represent issues that effect their area, and as the Midlands is outside the comfortable reach of all other brands of EV’s for someone requiring daily return trips, I thought it was extremely relevant to his role. I was surprised to get a call back two days later on a Sunday. I was more surprised with its context. The TD mentioned that relationships are “a two way street” and that Its convenient that I mailed him when I needed his “help” but i was unresponsive to his previous requests. I’ve met this TD briefly in the Past when speaking for free at a local council organised business event and once, nearly a decade prior, I requested his support for a work visa for a key member of our management team. He has my mobile number and direct email address. He has never contacted me directly; but he said he contacted my office and I didn’t facilitate his request. I asked him what the request was an he said it wasn’t relevant. I apologised profusely if he felt I had ignored him, said that that wasn’t the case and for disturbing him at all. I said I had clearly misunderstood that it was the correct course of action and the role of a TD to be made aware. He said well he won’t be helping me with any of “my” issues but would forward on my email as a gesture but I needed to remember its a “two way street”. I’ve investigated thoroughly his accusation of contacting my office. Any calls or emails for contact are directly emailed to me so we have full traceability. The only contact we’ve had from his office in the last decade was a photocopy newsletter requesting Money / campaign contributions – I sincerely hope this isn’t what he was referring to. If rural politics is a pay to play situation, then that to me is completely unacceptable and I won’t be dropping my ethics. Again I really do hope that he just inaccurately remembers reaching out for another purpose, or has mistaken me for another business owner.

Fortunately other Tesla owners reported better results contacting other TD’s. But they to date have shown little intention of honoring their original promise under which mean made purchasing decisions.

I emailed the garage where I bought the car and asked them would they buy the car back at a significant discount. The dealer said it was the 4th call he’d got that week from Irish companies and that unfortunately they didn’t have the capacity to buy back cars at that point in time so close to the end of year and that he didn’t want to insult me with a low ball offer. The market for Tesla’s in Ireland seems to have fallen through the floor.

So what is the current situation.

My options as i Understand them are:

1. Keep the car as planned in the company name and pay 300% the amount that was budgeted for, over 3 years. Then sell and buy a model 3 which would be more suitable anyway.
2. Move the car into my personal name pay more than double the amount budgeted for the use of transport, upfront to the tax man. Thats about €71,000! I’ll need to pay extra in income tax in the next month – for no income just to change the ownership name of the car.
3. Sell the car and take a 50% write down on the car, then buy another diesel commercial. And be similarly out of pocket to the above.
4. Move the business out of Laois so i don’t need to spend up to 20 hours some weeks in a car.

It seems Tesla owners are snookered, our pockets have been picked. Next time the government ask early adopters to trust their word though – was the short term win, for a proportionally small amount (relative to total tax income, obviously huge amount to the less than 100 people it effected) worth the future mistrust of the top contributors our society. Especially when any gains will be more than lost by fines for lack of carbon credits.

But wait there is more.


Having moved my personal no claims bonus into the company, its not possible to move the insurance back into my personal name. My full no claims bonus would have given 52 – 65% discount on insurance. Now the same car, same driver and same risk has more than doubled in price.

One thing is for sure. This was an over night, unexpected, roll back on government promises. It was targeted at a very very small number (less than 100 people) Entrepreneurs and Job creators. There was no consultation or forum given to pitch owners side which has been grossly misunderstood and exaggerated to assume everyone chose to spend double the amount of money to pay for the car that I did and that therefore they are entitled to fabricate up a tax, contrary to the promises they made. And that very very little notice of same was provided to allow a soft landing or disposing assets.

When people ask why Entrepreneurs and successful people become tax exiles on liquidity events to be tax efficient, the government would be well to remember how the government have constantly rallied against entrepreneur and job creators.

What’s the correct solution?

I strongly believe the correct course of action would be to grandfather the BIK promises to people who bought vehicles in 2018 as a direct result of the government promises for a period of three years. This is both logical and fair but seems unlikely to happen.

Loosing faith

Personally I’ve lost all faith in the current government because of their small thinking. As a result if i ever do achieve a major liquidity event in my entrepreneurial career, I’d no longer feel an obligation to do as an Irish tax resident. Maybe this is why our other Irish success stories tend to do be non-dom.

###### Update ######

About two weeks after this post, other Tesla owners who had contacted their local Green Party TD had had more success and managed to get this on the government agenda and fortunately for people who had made purchases based on the systems in place at the time, these promises were grandfathered down.

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