Brief Description

The Italian government is considering a 930 million euro (1 billion USD) incentive plan for the purchase of electric vehicles. The package being discussed by the Ministry of Industry includes fiscal incentives worth up to 13,750 euros, allowing citizens with an annual income below 30,000 euros to scrap their Euro 2 vehicles that have been in use for over 20 years and instead buy new electric cars. This measure aims to encourage people to abandon gasoline or diesel cars and choose electric vehicles.

According to the document, the purpose of this initiative is to adjust Italy’s existing vehicle fleet composition since the country has the oldest vehicle fleet in Europe with at least 11 million Euro 3 or lower-level cars.

Additional Information

The plan will be proposed at a meeting with representatives from the automotive industry on February 1st, according to a spokesperson from the Ministry of Industry. Data released by the Ministry of Transport on Tuesday predicts that new car registrations in Italy will increase by 19% in 2023, reaching approximately 1.57 million vehicles.

Currently, Italy’s market share for electric cars is lower than that of other major economies in Europe. However, signs of slowing down the adoption rate of electric vehicles are spreading across Europe after years of rapid sales growth. In order to avoid burdening factories and dealerships amid slowing sales growth, Audi, a subsidiary of Volkswagen Group, is scaling back its electric vehicle promotion plan.

In October, the Chief Financial Officer of Mercedes-Benz Group stated that competition in the electric vehicle sector is fierce and unhealthy. According to analysts at Citigroup in their report, it will be difficult for the European Union to achieve its end-of-decade targets for electric cars if industrial policies are not improved and automakers cannot quickly introduce cheaper electric vehicles.