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The Government extended the electric vehicle (EV) purchase grant of €5,000 in Budget 2019 - Leaving Cert Economics - Question c - 2019
Question c
The Government extended the electric vehicle (EV) purchase grant of €5,000 in Budget 2019. (i) Outline one economic reason why the government took the above action.... show full transcript
Worked Solution & Example Answer:The Government extended the electric vehicle (EV) purchase grant of €5,000 in Budget 2019 - Leaving Cert Economics - Question c - 2019
Step 1
Outline one economic reason why the government took the above action.
Answer
One significant economic reason the government extended the EV purchase grant is to reduce emissions and promote a cleaner environment. By incentivizing the purchase of electric vehicles, the government aims to decrease the reliance on fossil fuels, thereby contributing to a reduction in greenhouse gas emissions. This initiative aligns with Ireland's commitment to tackle climate change and improve air quality.
Step 2
State and explain one economic effect the above action may have on the demand for electric vehicles (EVs) in Ireland.
Answer
The extension of the EV purchase grant is likely to increase demand for electric vehicles in Ireland. As the grant reduces the upfront cost of purchasing an EV, more consumers may find these vehicles affordable and attractive. This increased affordability often translates into greater consumer interest and purchases, thereby boosting the overall market for electric vehicles as they become more competitive compared to traditional vehicles.
Step 3
State and explain two other actions the Irish government could take to encourage the purchase of electric vehicles (EVs).
Answer
Two additional actions the Irish government could take to encourage the purchase of electric vehicles are:
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Reduce motor tax/VRT: The government could assign a lower motor tax rate for electric vehicles. This would provide an ongoing financial incentive for consumers, making the cost of ownership more appealing.
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Plug-in points/charging stations: Investing in the installation of more public charging points for electric vehicles would alleviate range anxiety for potential buyers. By providing convenient and accessible charging infrastructure, the government can further encourage consumers to consider electric vehicles as a viable option.