New EV leasing mechanism introduced for businesses

The Government has announced the renewal of seven financial incentive schemes aimed at accelerating Malta’s transition towards cleaner and more sustainable transport systems, with a total allocation of €33 million for 2026.

The schemes – administered by the Ministry for Transport, Infrastructure and Public Works together with Transport Malta – promote the purchase and use of electric vehicles, electric motorcycles, low-emission petrol motorcycles, pedelecs (electric bicycles), as well as vehicles adapted for persons with disability or reduced mobility. Scrappage initiatives also form part of the package.

Of particular relevance to the business community is a new mechanism introduced this year which will extend grants to leased electric vehicles.

Under the revised structure, companies or individuals leasing electric vehicles will apply directly for the grant and benefit from the incentive themselves. Crucially, this arrangement will support the leasing of zero-emission vehicles without impacting the De Minimis State aid limits of leasing companies – a point likely to be welcomed by fleet operators and corporate mobility providers.

The measure is expected to facilitate greater EV adoption among businesses that rely on leasing structures, including SMEs and larger enterprises managing vehicle fleets.

The schemes also include scrappage initiatives to encourage the removal of older, higher-emission vehicles from the road, while specific grants remain in place to support the acquisition of vehicles adapted for persons with disability or reduced mobility. These incentives apply to individuals, voluntary organisations and enterprises, reinforcing their relevance across households and business fleets alike.

Applications are open for vehicles purchased from 1st January 2026 onwards, with the full set of seven schemes accessible through Transport Malta.

In addition to direct purchase incentives, this year’s framework introduces a new mechanism allowing companies and individuals leasing electric vehicles to apply for and benefit from the grant directly, without affecting the De Minimis limits of leasing companies.

Together, the measures form part of a €33 million allocation for 2026, building on €90 million invested between 2022 and 2025 and more than 15,000 grants approved over the past four years.

The full list of the grants is:

Financial Incentive 1 – New Electric Vehicles (Purchase or Lease)

Applies to new electric passenger cars, small vans (up to 3,500kg), motorcycles and pedelecs.

Grant amounts:

• €650 for new pedelecs
• Between €2,000 and €6,000 for electric motorcycles, tricycles and quadricycles
• €8,000 for passenger cars and small vans valued up to €40,000
• €6,000 for passenger cars and small vans valued between €40,000 and €100,000

Scrappage add-ons:

• €500 when scrapping a motorcycle
• €1,000 when scrapping a car
• Additional €1,000 if the scrapped vehicle was registered in Gozo

Financial Incentive 2 – New Electric Kick Scooters

Applies to individuals purchasing new e-kickscooters for personal use.

Grant amount:

• €150 (one-time grant)

Financial Incentive 3 – Used Electric Vehicles (Including Scrappage)

Applies to used electric vehicles in Categories L (motorcycles), M1 (cars), and N1 (vans).

Vehicle purchase grants:

• Category L
  • €1,000 (up to 3 months old)
  • €750 (3–6 months old)
• Category M1 or N1
  • €4,000 (up to 3 months old)
  • €3,000 (3–6 months old)

Scrappage grants (when combined with used EV purchase):

For scrapped vehicles in Malta:

• €500 (motorcycles)
• €500–€1,000 (cars/vans depending on licence status)

For scrapped vehicles registered in Gozo:

• €500 (motorcycles)
• €1,500–€2,000 (cars/vans depending on licence status)

Financial Incentive 4 – New Category L Petrol Motorcycles (Including Scrappage)

Applies to new petrol-powered mopeds, motorcycles, tricycles and quadricycles.

Grant amounts:

• €1,000 for:
  • Powered cycles
  • Two-wheel mopeds
  • Three-wheel mopeds
  • Light quadricycles (L1e-A, L1e-B, L2e, L6e)
• €750 for:
  • Low and medium performance motorcycles
  • Certain tricycles (L3e-A2, L4e-A2, L5e)

Scrappage grants:

• €500 (motorcycles scrapped in Malta)
• €500–€1,000 (cars/vans scrapped in Malta)
• €1,500–€2,000 (cars/vans scrapped in Gozo)

Financial Incentive 5 – Wheelchair-Accessible Vehicles (Taxis/Y-Plate)

Applies to new M1 category wheelchair-accessible vehicles licensed for passenger transport (Taxi or Y-Plate).

Grant amount: €10,000 per vehicle

Condition: Applicant must deregister a vehicle in Category M1 or N1 at least 10 years old.

Financial Incentive 6 – LPG Conversion Scheme

Applies to vehicles retrofitted to operate on LPG.

Grant amounts:

• €400 – petrol-powered M1/N1 retrofitted to LPG
• €900 – diesel-powered M1/N1 retrofitted to LPG/diesel dual system
• €1,000 – diesel-powered M2/N2 retrofitted
• €1,500 – diesel-powered M3/N3 retrofitted

Financial Incentive 7 – Retrofit of Emission Reduction Devices

(a) Photovoltaic Panels on Heavy-Duty Vehicles
Grant covers 80 per cent of installation costs, capped at:

• €500 for M2, N2, O3 vehicles
• €1,000 for M3, N3, O4 vehicles

(b) Battery Electric Powertrain Retrofit
Grant covers 80 per cent of retrofit costs, capped at:

• €20,000 for M1 and N1
• €40,000 for M2 and N2
• €80,000 for M3 and N3