A jump is expected in sales of electric cars for next year, following measures in Budget 2021.
Research carried out over the summer showed that 28% of people were planning to buy a car in the next 12 to 18 months.
As part of next year's budget, carbon tax has increased by €7.50 a tonne - meaning drivers are now paying more for a litre of petrol and diesel.
Motor tax rates were unchanged for almost all cars, but the most pollutant cars in the post-2008 regime will see increased taxes.
A new third motor tax table is also being opened for cars registered from January, taking account of new emissions tests.
And changes to vehicle registration tax (VRT) will be aimed at incentivising people to buy low emission cars.
Brian Cooke is the director-general of the Society of the Irish Motor Industry (SIMI).
He told Down to Business the growth in the electric sector has been steady.
"The industry is open, and by and large activity has been solid.
"I think dealers are doing good business - both on sales and servicing, on new car and used cars.
"But I suppose the context of it is the industry has struggled over the last three or four years since the Brexit announcement.
"So while activity has been consistent and solid this year, we're actually coming off quite a poor base."
'Disappointed with the budget'
Asked about measures for the motor sector in Budget 2021, he said the Government has been "very positive" on the electric vehicle side.
But he hit out at what he said were 'missed opportunities' to take older cars off the road.
"Certainly our members were exited by the budget, but not in a good way.
"There were tax increases across the board, even on the average family car.
"I think we were very disappointed with the budget: it was a missed opportunity for the Government.
"We are open for business, we've got the January selling period coming up.
"They could have generated a lot of money for the exchequer, protected the jobs there and actually reduced emissions by getting more new cars into the fleet and getting rid of older cars by actually reducing VRT.
"But they've actually done the opposite."
Electric growth
In 2019, electric cars accounted for 2.5% of all new car sales - with the figure for 2020 likely to be around 4%.
Mr Cooke said this number will rise, but it will take time.
"It is very new technology, and going hand-in-hand with the commencement of the electrification of the Irish car fleet - which will take a good few years.
"We need to see an infrastructure put in place as well - I think the SEAI have been given more money to help embed an infrastructure in Ireland as well.
"But that number of 4%, that will grow significantly next year - so we would hope maybe for 8% next year.
"So there will be a big growth.
"There's also plug-in hybrids as well where people who don't have the confidence, or even the budget, to go fully electric can get into a plug-in and they will get the experience of driving an electric.
"There are also incentives for the taxi fleet."
"Next year still over 90% of cars sold will be traditional, combustion engine cars.
"But we've come from zero, effectively, two or three years ago to maybe close next to 10% over the next 18 months.
"So I think that is a big step".
