Italy approves new car incentives of 650 million euros per year

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Drivers queue up outside a gas station in Catania

ROME (Reuters) – Italian Prime Minister Mario Draghi has signed a decree to allocate 650 million euros ($709 million) per year from 2022 through 2024 for incentives to buy electrified or low-polluting cars, the country’s industry ministry said on Wednesday.

The outlay is part of a wider 8.7 billion euro long term plan that Italy announced earlier this year to support its carmaking industry. This allocates 700 million euros in 2022 and 1 billion euros per year from 2023 until 2030.

The wait for incentives, which Rome had announced earlier this year, weighed on car sales in the first months of 2022, with analysts and lobby groups saying buyers were postponing purchases while waiting for the government to implement them.

New car registrations in Italy fell around 23% in February and 30% in March from the year earlier periods.

Rome will subsidise up to 5,000 euros of the purchase price of new electric vehicles costing up to 35,000 euros excluding VAT.

That includes a 2,000 euro contribution linked to the scrappage of a polluting combustion-engine car, the decree showed.

The purchase of plug-in hybrid electric vehicles costing up to 45,000 euros will be subsidised by up to 4,000 euros, while the plan also includes an incentive of 2,000 euros for state-of-the art combustion-engine (Euro6) cars costing up to 35,000 euros when older vehicles are scrapped.

Funds are also available for incentives to buy new motorcycles and for small- and medium-sized business to buy fully electric vans, according to the decree.

($1 = 0.9169 euros)


(Reporting by Giuseppe Fonte; Writing by Giulio Piovaccari; Editing by Kirsten Donovan)

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