Enhanced Financial Incentives for Electric Vehicles Set to Launch in Italy
Italy is taking a significant step towards promoting battery-electric vehicle (BEV) adoption with a €600 million fund starting in September 2025. The aim is to boost EV uptake, currently standing at only about 5.2-6% of new car sales, far below the European average of over 15%.
The Italian government is offering large incentives, up to €11,000 for individuals and up to 30% of the purchase price (capped at €20,000) for micro-enterprises, to encourage BEV purchases. These incentives are tied to scrapping older petrol or diesel cars (Euro 5 or lower) and focus on making EVs more affordable, especially for lower-income households.
The current lack of public charging infrastructure in larger urban areas is not addressed in the plan, but the Italian government is expected to coordinate these financial measures with complementary policies and infrastructure development.
The EU is also considering allowing hybrid and fossil-fuel-free ICE technology as a potential alternative to enforcing a blanket BEV strategy. This could lower climate-warming emissions faster than a BEV strategy, according to automakers, and is a response to concerns about comparatively high BEV prices and lack of charging infrastructure.
The Italian government's move is part of a broader trend towards promoting electric vehicles in Europe. The EU has delayed the introduction of scheduled fines for automakers not meeting mandated BEV sales, and the EU's review of its ban on the sale of new ICE cars from 2035 next year could impact the development and improvement of hybrid and fossil-fuel-free ICE technology.
However, Italy faces challenges in increasing BEV market share. The country's car market is struggling overall, with registrations falling and BEV sales in particular dropping by over 40% year-on-year. The low current BEV adoption relative to other EU countries, despite environmental commitments, is another hurdle.
To address these challenges, the plan aims to boost BEV sales in Italy and align incentives with broader industrial policies. The offer will be restricted to individuals and businesses living and working in larger urban areas, and the necessity to implement effective digital platforms for seamless access to incentives for both consumers and dealers is highlighted.
Success will depend on coordinating these financial measures with complementary policies and infrastructure development. The Italian government's initiative is a significant step towards reducing Italy's carbon footprint and bringing its market share of battery-electric vehicles closer to the EU average.
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