Bill puts electric vehicles grant at €5,000

Electric vehicle during charging (picture is illustrative).
Electric vehicle during charging (picture is illustrative). Source: Arvo Meeks/Valgamaalane/Scanpix

Draft legislation by the Ministry of the Environment will fixe Estonia's planned electric vehicle grant at €5,000 and designates that vehicles must be used mostly in Estonia.

The €5,000 per vehicle grant will be available to companies registered in Estonia or private individuals who have an Estonian personal identification code. In addition to the requirement of cost-sharing, companies and individuals are expected to cover at least 80,000 kilometers in four years, most of it in Estonia.

"The minimum mileage requirement was agreed on after considering feedback from target groups," the bill reads.

The location of vehicles purchased using the grant will be monitored using a GPS device to be paid for by the Estonian Environmental Investments Center (KIK). Buyers who do not want to install the device will have to report kilometers traveled to KIK once a year and be ready to present the vehicle for inspection.

The instrument can be used to purchase vehicles that cost up to €50,000 (VAT excluded). A company can use the grant to purchase a maximum of 15 vehicles, while individuals will have to do with one. The support instrument only applies to new vehicles bought from an AMTEL (Estonian Vehicle Dealers and Services Association) certified dealer and must have a top speed of at least 60 kilometers per hour.

It was decided in the drafting process that reduction in CO2 emissions must be achieved in the Estonian transport sector, meaning that only fossil fuel saved in the territory of Estonia will count toward the target. This is why vehicles that qualify for the grant must cover 16,000 kilometers on average every year.

"Because the instrument is aimed primarily at businesses and sports a relatively modest minimum mileage requirement, it is believed to help activate a second-hand electric vehicles market in Estonia that should benefit individuals looking to buy an electric vehicle," the bill's explanatory memo reads.

The bill has several other limitations, including not making more than €200,000 in support available to a single company in three years. The measure also cannot be used to support rental and road transport companies that move goods in exchange for payment in procuring trucks. Companies eligible for the instrument must not owe tax arrears.

The aim of the grant is to motivate companies and people to adopt electric vehicles and contribute to a clean environment.

The grant will be available through the Estonian Environmental Investments Center in the total volume of €1.2 million.

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Editor: Marcus Turovski

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