Speculation rife that electric car grants could rise to €14,000

After Finance Minister Clyde Caruana said over the weekend that the 2022 Budget would contain a “substantial allocation” to encourage the purchase of electric vehicles (EVs), speculation is rife as to the exact form this will take.

Stakeholders, speaking to BusinessNow.mt, said they had heard rumours that the current grant of €8,000 may increase to €11,000 or even €14,000. As is the case currently, these can increase by another €1,000 when scrapping an old vehicle.

Minister Caruana cut the ribbon on the rumour mill over the weekend when, during a consultation meeting in Gozo, he said the funds allocated to the EV sector in the upcoming Budget would be “substantial” and “never seen before”.

Car importers are now expecting an increase in the grant that will make EVs more attractive than ever.

A managing director of Industrial Motors Ltd and Nissan Motors Ltd, representing various EV brands on the local market, said earlier this month that the Government needs to soften the blow of what for most local workers is a large expense comparable to an entire year’s salary.

He pointed out that over half of Malta’s car market is in fact made up of used vehicles, estimating the average price for most vehicles to be around the €5,000 to €6,000 price range, “precisely because most people are not willing to spend quite so much”.

Currently, the cheapest EV, even after taking into consideration the Government grant, costs just over €20,000.

If the grant jumps by €3,000 or €6,000, as suggested by several dealerships, this could have a significant impact on the market.

However, other stakeholders point out that an increase to the allocated funds does not necessarily mean that the amount of the grant will increase.

What we might see instead, says Luke Zammit, founder of the Electric Vehicles Malta Community, is an increase in the number of grants.

One sales representative confirmed that this could be the case.

“The grant always runs out, leaving people waiting for months until they get their refund back. Simply fixing that will already increase demand for EVs,” she said.

EV enthusiasts will now be looking forward to 11th October for the Budget, with the Government expected to do its utmost to add an estimated 7,200 EVs to Maltese roads every year to achieve its decarbonisation goals.