Newshub understands the Government is set to announce major changes to the Clean Car Discount scheme.
The programme pays a subsidy to buyers of low emission vehicles and is supposed to be paid for by a fee charged on heavy polluters - the scheme was designed to be revenue neutral.
But demand for low-emission vehicles has well outstripped the fees collected, so the Government is having to rethink it.
Currently discounts are available to varying degrees for EVs, Hybrids and low-emitting petrol vehicles like Suzuki Swifts.
Newshub understands the Government will make a pre-Budget announcement on Tuesday seeking to lower the cap of emissions - discontinuing discounts for low emitting petrol vehicles, meaning only hybrid and electric vehicles will receive the subsidies.
The success of the policy has seen record numbers of electric vehicles being purchased.
It’s understood the scheme has also delivered higher than expected emissions savings.
