Transport Malta will be stopping the financial incentives for the purchase of new or used plug-in hybrid vehicles, giving people till the end of May to order their car to benefit from the aid.

The agency said the budget for the scheme was fully taken up. It will, however, still pay the €11,000 grant for those who order their vehicle before the end of the month, even if the vehicle will be delivered later in the year or in 2023.

It said individuals purchasing a vehicle may benefit from a range of other incentives including the €11,000 grant for fully electric vehicles, which is the most generous in the EU and is crucial for the decarbonisation of the land transport sector in Malta. This grant increases to €12,000 if an older vehicle is scrapped.

In his budget speech last October, Finance Minister Clyde Caruana had unveiled a raft of fiscal incentives aimed at promoting the use of electric and plug-in hybrid vehicles and get as many combustion engine cars off the roads as possible.

As part of this policy drive, the government offered a subsidy of up to €11,000 when purchasing a new electric or plug-in hybrid vehicle.

The €3.5 million budget for the plug-in hybrid grant was taken up in just a few weeks due to a high demand for such vehicles. The ministry topped it up by a further €1 million but even this was not enough.

It also reported that delays in the delivery of vehicles from abroad was resulting in customers losing out on the financial incentives.

Customers seeking to purchase plug-in hybrid vehicles said they were told the promised financial incentives could not be guaranteed since the car they ordered would be delivered in 2023.

Leading car importers said the delays almost brought sales of plug-in hybrid cars to a complete standstill because customers did not want to commit to purchasing the vehicle if they were not given assurances about the fiscal aid.

The problem had been flagged several months ago when the importation of cars had already been delayed due to shortages and logistical problems because of manufacturing disruptions and COVID-induced shutdowns.

The shortages were mainly in electronics. The war in Ukraine has exacerbated the problem.

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