ROME: Italy’s Industry Ministry announced Thursday that it will provide 950 million euros ($1 billion) in subsidies this year to help drivers switch to cleaner cars and boost the auto sector.
The new incentives come amid a clash between Italy’s right-wing government and Fiat owner Stellantis over the group’s production levels in the country. Prime Minister Giorgia Meloni said last week that Stellantis, which also has major operations in France and the United States, had at times acted against national interests.
Rome will give the lowest income earners a subsidy of up to 13,750 euros to help them buy a new fully electric car costing up to 35,000 euros excluding VAT. Some of the subsidies are related to the scrapping of existing internal combustion engine vehicles that pollute the environment.
Those in the same income bracket can also receive a subsidy of up to 10,000 euros for new plug-in hybrid cars costing up to 45,000 euros.
State-of-the-art internal combustion engine vehicles are also eligible for subsidies, although they are smaller.
This incentive has been expected for several months and is more generous than alternative incentives, which can amount to up to 5,000 euros for electric cars.
The spending is part of a broader multi-year plan of more than €8 billion announced by Italy in 2022 to support its automotive industry.
Davide Mele, head of corporate affairs at Stellantis Italia, said the package should help Italy improve its lagging position in the transition to electric vehicles and support the domestic car industry. .
“Production is closely linked to market demand, and if we want to aim for specific goals, we need to keep in mind not only the producers but also the consumers,” he said at a meeting with government officials and trade unions. he said.
“We build cars based on consumer demand, which is why it’s important to stimulate demand with affordable cars,” he added.
The government and Stellantis, Italy’s only major carmaker, have been in talks since the summer on a long-term plan to reverse production declines, including increasing Stellantis’ domestic production to 1 million cars a year. It also includes goals to increase. By 2023, this will be around 750,000 units.
Stellantis CEO Carlos Tavares said last week that Italy has been spending less on supporting electric vehicle development than other major European countries, and that approach is holding back production.
($1 = 0.9260 euros) (Additional reporting by Giulio Piovaccari in Milan; Writing by Keith Weir; Editing by Gianluca Semeraro and Mark Potter)
