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Global EV Transportation Review

Key Regional Markets


Italy’s automobile industry is up for a major transition with the surge in demand for electric vehicles. The subsidies, coming after a delay, will catalyse the demand for electric vehicles by a significant margin. The policy objective has been clear in terms of the need for electrification to achieve decarbonisation goals and is following the examples of other leading European counterparts. The charging network access is one of the elements that could impact the growth, either in terms of facilitating it or impeding, based on progress.

GDP (Current Prices) USD (2021)

2,101.28 bn

GDP Growth Forecast (constant prices) (2021-2025)


EV Penetration

3.8% of total new passenger vehicle registrations by 2022

EV Target

Planned Year of Phasing Out ICE Vehicles

GDP Source: IMF, World Economic Outlook

EV Penetration and Trend

Trends in Share of Passenger Electric Vehicle Sales

Trend in Electric Vehicle Registration

Source: UNRAE
Note: The data above refers to battery electric vehicles and does not include hybrids

The long-term trend in battery electric vehicle registrations indicates a consistent demand. Yet, the decline in 2022 was a surprising and contrasting picture to other European markets. This meant that other competing segments namely the internal combustion engines, as well as the hybrids would have held their respective shares. Notably, the plug-in hybrids too reported a decline, but the quantum was lesser than the battery electric.

Source: ACEA

Some of the factors contributing to the decline lie on the demand-side. The Italian automaker association held that the delay in rolling out incentives for electric vehicles, impaired the demand during the year. The inflationary pressure and a depressed purchasing power worsened the overall market sentiment. While policy and regulatory support was introduced, it may have been too little and too late for the period.

It is also pertinent to note how electric vehicles fit in the overall alternate fuel-based transportation. As of 2022, about 693,000 alternate fuel vehicles were registered. Over 70% of them were based on hybrid drivetrains. Making an inroad in such a market would necessitate making battery electric ones as seamless and easier in access as for conventional ones. A constrained access to public charging and limited battery range continue to be impeding factors in battery electric vehicle penetration.

Trend in Electric Bus Registrations

Source: European Automobile Manufacturers Association (ACEA)
Note: The above data refers to both battery electric and plug-in modes

In other sub-segments, the push for electrification appears to have maintained a momentum. Albeit with a low base, the electric bus registrations have gained significant traction. Pending official press releases, the total electric bus registrations by end of 2022 could present a similar growth factor as in 2021. To be sure, diesel-based registrations still hold the sway. It is however expected that the relative balance will gradually shift in favour of the electric ones.

Charging Infrastructure

Source: European Alternative Fuels Observatory

The growth in charging network shows a relative acceleration since the end of 2021. The capacity is low when compared to its counterparts in Europe, especially the ones with high electric vehicle penetration. As of June 2022, the European Automobile Manufacturers Association ranked Italy at fifth position for the absolute number of chargers installed. But the top- ranking country in this study (The Netherlands) had four times the capacity as Italy’s. With slow pick up in the fast-charging capacity and the disparate growth in network reach, the charging infrastructure is in a catchup mode with the anticipated vehicular segment growth. 

Among the recent challenges that emerged for the charging services include the costs – rising electricity prices since late 2021 (as a fallout of Ukraine-Russia armed conflict) made charging stations pricier than the gas stations. As of November 2022, such costs more than doubled year-on-year.

Some of the Italian cities have made better progress in expanding charging network reach. Survey results as of April 2022 indicated some of the notable ones in this regard. The city of Florence stands out for the maximum number of charging points – 14.17, available per 10,000 inhabitants. The next few cities in the ranking include Bologna (7.25), Rome (6.04) and Genoa (5.54). Though not established as axiomatic, the association between charging network reach and electric vehicle penetration is a strong one, with one feeding on the other.

Policy Regulation

A revised set of incentives and support measures were announced in 2022 for the electric vehicle market. The overarching goal is to progress with decarbonisation. The National Integrated Energy and Climate Plan (PNIEC) lays out the targets in this regard. Also important is to stay aligned with the European Union goals in clean energy and its share in total primary energy consumption including transportation. The EU’s goal to ban sale of new ICE vehicles from 2035 is incumbent upon Italy, like other member countries of bloc.

In April 2022, the government approved an annual €650 million allocation for the electric and other low-emission vehicles for the period through 2024. The funding was to enable purchase incentives. A subsidy worth €5,000 was made available for the purchase of new electric vehicles that cost up to €35,000 without value added tax. The subsidy amount includes a €2,000 contribution for scrappage of ICE vehicle. In case of the plug-in hybrid vehicles costing up to €45,000, the subsidy was up to €4,000, including a planned €2,000 contribution for old unit scrappage. For the year 2023, the outlay for the electric vehicle incentives is at €150 million.

The formulated incentives have scope for the conventional vehicles as long as their emissions are in the range of 61-135 gm CO2/km. The ambit of subsidies also includes non-electric motorbikes and mopeds. The disbursal of subsidies will follow the principle of ‘one subsidy per household’ including the cases of leasing contracts. A part of the allocated funds for subsidies is for rental companies, but the stipulation is that the vehicles should be held for at least a year from purchase.

Subsidies are separately allocated for electric vehicle procurement by the small and medium enterprises. The incentives are structured by vehicle weight – €4,000 for up to 1.5 tonnes, €6,000for the ones ranging 1.5-3.5 tonnes, €12,000 at 3.5-7.0 tonnes, and €14,000 for 7.0-12.0 tonnes. This set of incentives was budgeted for €15 million in disbursal through 2023.

Market Opportunity

Leading automakers have been making investments towards preparing for the transition to electric vehicles. The planned investments are likely to manifest in varied forms, such as in terms of joint ventures for competitive and cost-effective locations globally. The luxury auto manufacturer Ferrari, for instance, announced that its first electric vehicle will be launched in 2025. The company projects full-electric and hybrid-electric vehicles to contribute 80% of its sales by 2030. A similar luxury brand Lamborghini is aiming for the similar pivot, with a plug-in hybrid vehicle in 2023 and a full-electric by 2030.

An important planned investment in Italy, among automakers, is that of Stellantis. The company, through its venture ACC (with Mercedes Benz and TotalEnergies) plans three Gigafactories of which one of them is slated for Italy. The planned battery capacity will be established by reconfiguration of its existing engine and gearbox plant at Termoli of Italy. Development work will start from 2024, with initial operations planned for commencement within 2026. The total investment is estimated at €2.3 billion, aided by public funding worth €370 million.

Since last 1-2 years, public procurement of electric buses rose at a rapid pace. Some of the leading cities are thus placing orders for electric buses, as replacement for the existing transit fleet of operators. Leading OEMs such as Solaris have cornered most of the orders in recent year, though others, especially Chinese manufacturers are gradually coming to the fore. In January 2023, the transit company Busitalia signed a framework agreement with Iveco Bus for 150 electric buses required between 2023 and 2025. Notably, the manufacturer Iveco started its new powertrain facility in Turin at Italy in October, in anticipation of the demand. Various other entities are reported with making a market entry to tap into the demand. In June 2022, Enel X (subsidiary of Enel) and Arrival entered into a partnership to test electric bus launch in Italy. The testing, involving Enel X’s advance charging services, was aimed at assessing the feasibility of the Italian market.

For practically all investors, a significant part of the attention is towards the Italian charging network sub-segment. With the wide scope of expansion, private players have a huge untapped opportunity even with the upcoming publicly-funded capacities. In June 2022, the electrical equipment manufacturer ABB, under its business segment ABB E-mobility, launched a DC-based fast- charger production facility in Valdarno of Italy. This entailed a $30 million investment, with the result that the company could now avail of a double production capacity.

Fast-charging is also the focus of several joint venture investment projects. Enel X Way and Volkswagen launched the joint venture Ewiva to build a high-power charging network of 3,000 charging points across Italy. Each such charging point will be based on rated power of up to 350kW and will be based on renewable energy. The first such charging station was inaugurated in Rome, as of December 2022. The entire project could be completed by 2025. Among other areas, the emerging technology options such as induction charging are under active consideration. In June 2022, the Brebemi highway in Italy’s Lombardy had a successful test-launch of an induction charging system, involving an electric bus and passenger car. Funding support for the charging capacities also include institutional support. As of March 2022, the Italian charging service entity Duferco Energia, received €26 million in funding through contracts entered into with Cassa Depositi e Prestiti, Crédit Agricole Italia, and the European Investment Bank.


Italy’s auto industry faces a major transitory shift for the 2035 goal of stopping new sale of ICE vehicles. The government acknowledges that it is a major challenge for the indigenous manufacturing base, which is why the subsidy allocation for electric vehicles are part of a larger package for the automotive industry’s overall restructuring. It is noteworthy that the automakers of this industry have mostly aligned towards hybrid options for now and not majorly towards the fully electric ones. The same reflects in the breakup of registrations in alternate fuel vehicles.

In January 2023, the Ministry of Environment and Energy Security laid out the policy target of installing over 21,000 charging stations by 2026 for the urban and inter-urban roads. This would include financing of at least 7,500 superfast charging points (about 175kW in rated power) and 13,755 fast-charging points (90kW) in the cities. Expanding the charging network will be among the critical points of infrastructural push that could help facilitate the decarbonisation and electrification goals.