The grant from the state to buy a new electric car is dropping by 30%.
It was set at €5,000 - but will now only be worth €3,500, with the Department of Transport saying there will be lower cost EVs coming onto the Irish market this year.
Figures from DoneDeal earlier this year showed 70% of drivers are considering an e-vehicle as their next car - however, the price is a main barrier for many of those hoping to buy.
The state has a target of getting one million electric cars on Irish roads by 2030.
In a statement, the Department of Transport said, "Zero Emission Vehicles Ireland (ZEVI), an office within the Department of Transport, has confirmed the maximum private vehicle car grant will be set at €3,500 for applications from July 1, 2023, down from the current maximum of €5,000.
"Ireland has a buoyant demand for electric vehicles; 2022 saw an 81% increase in registration of EVs compared to the previous year (CSO).
"As of end December 2022, there were 73,574 electric vehicles on Irish roads. This year we are also seeing the arrival newer EV models on the Irish market that are lower in cost.
Government investment strategy for electric vehicles will begin to rebalance towards supporting EV charging infrastructure.
"This change aligns with similar polices in European nations, where countries including Norway, Germany and France have begun to curb vehicle subsidies and government investment in EVs is moving towards infrastructure."