Andrew Aquilina

Grants for the purchase of EVs have been available for the past four years, with the majority of grants being over-subscribed within a few months from them being launched. Grants for the purchase of EVs increase from one budget to another which shows the governments’ commitment to meet its targets. This is very encouraging and augurs well for the Malta’s targets. 

Although grants, at face value, are very aggressive, especially for the private citizen wanting to purchase a standard passenger vehicle, such grants do not always address the needs of local businesses wanting to jump on the bandwagon and upgrade their own fleet.

Even though here we are tackling the same subject, that of EVs and the end result remains the same, there are a number of factors which differ between EVs for private use and EVs for commercial business use. These factors and realities all need to be taken into account in order to successfully reach our goals. 

Primarily, the cost of vehicles is remarkably different. A normal M1 passenger vehicle average at around €27,000 while an average N1 vehicle (goods carrying van up to 3,500kg) can easily average between €50,000 and €70,000. This difference is, at the moment, being absorbed by local businesses, since grants in place do not cater for this. 

Such grants and subsidies should therefore be more aggressive and reflect the cost of the vehicle. In this regard, if a light passenger vehicle which (normally costing around €27,000) is eligible for €12,000 grant, larger vehicles such as vans (normally costing between €50,000 and €70,000) should be eligible for a larger subsidy in proportionate with the current grants.

Secondly, businesses, especially those with large fleets need to make a massive investment, in order to upgrade their current fleets. Although current grants are available for businesses, these do not cater for large fleet operators.

In line with governments’ strategy of increasing the number of electric cars on the road, Malta Chamber of SMEs is proposing that grants and incentives currently available are made more attractive and accessible for businesses. This should be through a dedicated scheme separate from the one currently offered in order to reflect these specific requirements. 

The latest data available reveals that the total average age of vehicles licensed in Malta is of 14.69 years compared to the 9.73 years EU average. This is according to the latest Malta transport statistics. This is even more amplified, when discussing commercial vehicles. In the case with commercial vehicles not only have a high average age but also consume much more mileage than an average standard consumer vehicle.

Companies such as those operating car rental and leasing and other large fleet operators such as chauffeur driven, generally change fleets every four to six years depending on usage of the vehicle. This is normally calculated on the mileage consumed by the vehicle.

As an example, unlike a standard passenger vehicle, a normal cab can easily register 100,000km in any one year therefore within 4 years operators will opt to purchase newer vehicles.

Under current schemes one can opt for the maximum grant (of €13,000) should one decide to scrap a vehicle that is older than 10 years, something which does not make sense for business’s given the above.

The Malta Chamber of SMEs welcomes the governments’ commitment in the last budget to allocate funds specifically for businesses in order to help them transition towards electrification. With the ambitious EU targets, everyone needs to be on-board and pulling the same rope towards achieving such targets, this can only be done with the full support and enthusiasm of local businesses and the industry in general.

The Malta Chamber of SMEs through its dedicated transport sub-committee, has taken a pro-active approach to propose a set of proposals aimed at ensuring that businesses are encouraged to transition towards electrifying their fleets, thus ensuring that business also contribute towards achieving national targets and more importantly ensuring a sustainable future for the generations to come.

Reaching our goals,realistically

Mario Ciantar

The electrification of vehicles has been on the agenda for some time now and has now started to get traction in terms of consumer acceptance and also preference over ICE vehicles.

The government’s incentives in this regard, definitely helped in driving consumers towards this direction. This is greatly welcomed and encouraged. The advancement in technology and competition – together with grants – is also contributing towards achieving price parity when comparing EVs with ICE vehicles.

This however is not across the board and in the case of all vehicle types. With heavy vehicles, the situation is different and slightly more complicated. Sectors such as those operating within the supply chain such as Cargo Hauliers often make use of these heavy vehicles.

Technology readiness and market appetite differs. In fact, in the case with large trucks several manufacturers claim that truck manufacturing will most likely move towards hydrogen fuel cell type vehicles. This said, technology in this sector is still evolving. Volvo have claimed that they are targeting hydrogen fuel cell production by 2025 and aiming for half its European sales in 2030 to be trucks powered by batteries or hydrogen fuel cells.

These industry targets differ significantly when compared with targets set by manufacturers for passenger vehicles with Volkswagen AG, the planning that for more than 70 per cent of its namesake brand sales to be EV from 2030 onward while Renault planning to reach 90 per cent by 2030.

Additionally, price parity is between electric trucks and ICE trucks is still very far-off and it is likely to remain as is in the next few years.

As an example, a hydrogen fuel cell type truck will cost between €300,000 and €400,000 according to different reports which a diesel-powered average cost is between €90,000 to €125,000, depending on the extras. Those whose operations only cater for the local market often normally opt to purchase a second-hand truck with the latest euro engine. This is because our local market allows this, given our short distances, small operations and given it is normally not economically viable for operators. In this case a second-hand truck would cost between €25,000 and €35,000 which continues to increase the price disparity.

The Malta Chamber of SMEs through its dedicated sub-committee on transport, had proposed that given the above limitations, shortcomings and challenges faced by the sector, the governments’ strategy should aim for finding a middle ground as opposed to targets set for passenger vehicles. The idea is to encourage investment that makes business senses whilst ensuring a gradual shift towards more sustainable use of transport and equipment.

This can be achieved through a number of different incentives offered for operators to transition towards this goal. Recently the government through Malta Enterprise launched a scheme for the construction sector to encourage operators to upgrade their equipment to greener cleaner and more energy efficient. This scheme was a huge success and has been over-subscribed.

Similar schemes should definitely be offered for those operating within the supply chain industry to upgrade their vehicles and equipment. The schemes would incentivise businesses to scrap their current vehicles and upgrade them to newer ones in line with the latest Euro engine, currently Euro 6 engines.

Another possible intervention could also be the retro-fitting of vehicles. There are several options to do so, which includes the fitting of diesel particulate filters and upgrade of catalysts and also the installation of devices which would drastically reduce emissions. Another option could also be to install a heavy-duty dual fuel system which can be easily retrofitted and again, heavily reduce emissions in line with the latest industry standards. 

Given the market limitations, the economic viability of investments and the conditions faced, the government should opt for a transitionary solution which would ensure that heavy vehicles are upgraded to newer, greener and less emitting ones while meeting the industry needs in terms of viability and business sense.

While acknowledging the challenges posed and the limitations in place, the half-way measures encourage investment for more sustainable solutions while addressing the realities in place in order to ensure a shift towards cleaner use of vehicles and equipment.

From concepts to reality: A multimodal shift

Paul Abela

In 2019, the Malta Chamber of SMEs partnered on a project which was led by Transport Malta.

The project was conducted in collaboration with the Ta’ Qali Tenants Association and involved the purchase of an electric goods carrying van which was available for a number of tenants operating from Ta’ Qali Crafts Village.

The project is an EU funded project entitled Civitas Destinations, which Transport Malta is participating in and aims to study the feasibility of consolidating the deliveries of various companies in Ta’ Qali with the use of a shared electric goods vehicle. As part of this project, participants were given an electric van for one whole year to make use of this van for consolidated deliveries. In total seven businesses participated in this pilot project.

The concept behind the project was to make organised deliveries to Valletta more sustainable and efficient, and to promote cross-collaboration between different businesses. The Malta Chamber of SMEs has always championed and promoted these values within its core function as these are values and practices which should be encouraged.

There are a number of benefits associated with consolidated last mile delivery, some of which are underestimated. Primarily, this concept has a direct impact at reducing traffic congestion, an issue which will persist unless everyone makes changes. In highly dense localities such as Valletta, such issues are further amplified.

Fuel, maintenance and transportation costs are also kept at a minimum with businesses being able to focus and shift their savings elsewhere. This is especially in cases where the goods carrying vehicle used is an electric vehicle, thus further increasing the savings for users. As an example the project reduced around 150 trips which would normally have taken place if it wasn’t for this initiative.

Finally, such initiatives optimize delivery routes, increase flexibility and support business scalability – ultimately such practices also increase productivity.

The project for Ta’ Qali Tenants Association was a great success and are currently evaluating of the feasibility of purchasing their own van with the aim of consolidating deliveries in the future is taking place.

We believe that this project was a good starting point – and the experience gained should be embraced, further developed and definitely not lost. This experience in fact served as a basis for other possible green initiatives which the Malta Chamber of SMEs. 

As a result the SME Chamber realised the need for increasing knowledge on EVs with its members. Although the general public has embraced the idea of shifting to EVs as opposed to conventional ICE vehicles, businesses still need to analyse if such solutions fit within their business model.

In this regard, the SME Chamber in collaboration with the Foundation for Transport, is currently studying the possibility of launching a pilot project aimed at achieving a number of results mainly to understand the issues businesses face when using an EV and to give the opportunity for businesses to see if an electric vehicle is suitable for their business needs. Through this initiative we would seek to encourage businesses to make the shift from ICE vehicles to EVs.

The SME Chamber also believes also that the promotion of multimodal mobility should be a concept promoted with businesses. We believe that government should be a key promoter when it comes to innovative solutions and collaborative solutions. 

In the last round of consultation on the European Regional and Development Funds, the SME Chamber proposed the creation of a last mile delivery hub for businesses delivering to Valletta and the surrounding Localities. This is following the success pilot project with proved very beneficial for businesses to combine deliveries and deliver goods collectively in areas that are problematic such as Valletta and the surrounding regions. 

A large national project can possibly be developed, through the creation of delivery hub and the support of regular delivery service to Valletta and the surrounding localities. Support may include support; the allocation of a logistics centre, the purchase of EVs catering to the different needs and requirements, IT infrastructure involved in the setting up of a common platform which should be automated as much as possible, delivery personnel and the inclusion of advanced software solution which would automate and make the process as efficient as possible, possibly through the use of AI via predictive route planning software.

The SME Chamber can be both a leader and a facilitator to assist the government in implementing such schemes. 

These possible interventions all lead towards addressing the issue of sustainability and promote innovative green initiatives which ultimately ensure the sustainability of Maltese businesses.

Andrew Aquilina is Head of Policy, Malta Chamber of SMEs, Paul Abela is President of the Malta Chamber of SMEs and founding Board member of the Foundation for Transport and Mario Ciantar is a Board member of the Malta Chamber of SMEs and member of the cargo hauliers sub-committee