The maximum grant to buy a new electric vehicles and scrap a combustion engine car that it at least 10 years old has been increased to €12,000, Finance Minister Clyde Caruana announced.
This amounts to an increase of €3,000 over the previous grant.
As part of a policy drive to increase the use of electric and plug-in hybrid vehicles, Caruana said the new grants will come into effect from tomorrow.
The subsidy to purchase a new electric or plug-in hybrid vehicle without scrapping an older car has also been raised to €11,000.
Scrapping an old car will qualify for a subsidy of €2,000.
The Finance Minister also announced the extension of a five-year exemption on the payment of license fees for electric vehicles. Electric vehicles will also be exempt from registration tax.
In the next three years, the government aims to install 1,2000 charging points across the country.
Minibuses, coaches and trucks that install photovoltaic panels will be eligible for a maximum grant of €900.
A cut-off date to ban the importation of polluting petrol and diesel cars has yet to be announced, despite several years of discussion.
Three suggestions for a possible cut-off date were made in a green paper published in June.
The three possible cut-off dates are before 2025, between 2025 and 2030 or between 2030 and 2035.
An early cut-off date would contribute towards a more rapid reduction of air pollutants and contribute towards the decarbonisation of the transport sector.
"However, the cut-off date should strike a balance between realising these benefits and allowing sufficient time for future developments necessary to overcome existing barriers,” the Green Paper says.
The number of electric vehicles within the national fleet has increased from 36 in 2013 to over 4,000 by July 2021.
Prime Minister Robert Abela has said Malta aims to become a leader in decarbonisation.