The motor industry and car buyers were challenged to go electric in the Budget.
Mr Noonan extended VRT relief (€5,000) on electric vehicles for five years.
In doing so he gave medium-term assurance to sellers and buyers that electric cars will be subsided for the foreseeable future.
He said it would give the motor industry and consumers a chance “to invest in cleaner technology”.
His decision on electric cars means buyers will continue to get a total of €10,000 off the price of the vehicle as they also qualify for a €5,000 Sustainable Energy Authority of Ireland (SEAI) grant
He also encouraged the purchase of hybrid vehicles by extending current VRT relief (worth up to €1,500) for two years.
And buyers of plug-in hybrids will get up to €2,500 VRT relief plus a €5,000 SEAI grant – a total of €7,500 – over the same two-year period.
Mr Noonan is also starting measures to help reduce dependence of larger vehicles on diesel so that natural gas used as a vehicle fuel will be taxed at the new minimum rate of excise for eight years.
He said the measures were part of a plan to make Ireland a low-carbon economy
Significantly, however, he didn’t increase excise duty on diesel.
Society of Irish Motor Industry (SIMI) director general Alan Nolan welcomed the measures.
He said the industry needed a steady-as-you-go Budget to try to support an industry that has had already had exposure to Brexit with UK imports soaring.
“The fact they have extended electric vehicle relief for five years means the industry can plan and support more electric cars,” he told Independent.ie.