New car prices are to rise from next year for the highest emission vehicles following changes announced in the budget.
A revised Vehicle Registration Tax table is being introduced and while the 20 band table is being retained, there will be a hike in VRT rates of between 1% and 4% for cars with higher emissions.
Motorists also face a rise in petrol and diesel prices from midnight when carbon tax increases take effect.
The price of a 60-litre tank of petrol will rise by around €1.30 while a full tank of diesel will cost an estimated additional €1.50.
For electric vehicle drivers, the €5,000 relief is being extended to the end of 2023 and the Vehicle Registration Tax relief on electric vehicles is to be extended too.
The Benefit in Kind (BIK) exemption for electric vehicles will be extended out to 2025 with a tapering effect on the vehicle value which will take effect from 2023.
For BIK purposes, the original market value of an electric vehicle will be reduced by €35,000 for 2023, €20,000 for 2024, and €10,000 for 2025.
Despite the continuation of some incentives for the purchase of electric cars, the Society of the Irish Motor Industry was critical of measures that will hit the majority of people buying new cars.
"The increases in VRT on the back of Covid-19, Brexit, increased fuel taxes and the dramatic VRT changes in last year's Budget are hugely disappointing," Brian Cooke, SIMI Director General said.
"These increases only add to the already heavy tax burden on new cars, and will serve to slow down the renewal of the fleet, acting as a barrier to reducing emissions," he added.