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Italy's new-car market has been facing challenges, with the relatively prosperous results from March and April no longer being observed. The Italian market has been struggling, with declining car sales and an aging vehicle fleet averaging 12.5 years old. This structural weakness, combined with relatively low electric vehicle (EV) adoption compared to the EU average, has hindered the growth of the EV market in Italy.
In July 2025, Italy's new-car market experienced a 5.1% decline compared to the same month in 2024. Hybrids were the preferred choice, accounting for 44.3% of the market share, with a total of 52,496 vehicles registered. However, the combined market share of EVs (BEVs and PHEVs) in July 2025 was 12.4%, up from 7.3% in July 2024. BEVs captured a 4.9% market share, while PHEVs enjoyed an 83.2% increase in sales, commanding a 7.4% market share.
The plug-in market share in the first seven months of 2025 was 10.7%, an increase of just 2pp since January. This slow growth rate is in stark contrast to the EU-wide battery-electric market share, which reached 15.6% in the first half of 2025.
Recognising the need to boost EV adoption, the Italian government recently announced new incentives to promote BEV adoption. Plans include providing around €600 million from the National Plan for Recovery and Resilience (PNRR). These incentives are expected to significantly support market growth and help Italy catch up with the broader European EV penetration.
The new incentives include subsidies of up to €10,000 for private buyers scrapping older cars. This financial incentive is designed to accelerate EV uptake by offsetting the higher initial cost of electric vehicles and encouraging the retirement of older, more polluting vehicles.
Despite these challenges, there are signs of positive momentum in electrification. Between January and July 2025, a total of 104,121 EVs were registered in Italy, representing a 43.4% year-on-year increase. All electrified registrations (hybrid, BEV, and PHEV) recorded a 14% year-on-year lift in July 2025, totaling 67,149 units.
However, the market share of plug-in vehicles has stagnated, leading to uncertainty and perplexity among potential buyers. The Italian automotive industry association, ANFIA, highlighted continued confusion over emissions targets as a key driver of market inertia.
In conclusion, Italy's main hurdles are its shrinking and aging car market, low EV adoption relative to EU peers, and delayed regulatory push. The new, targeted purchase incentives coupled with scrappage bonuses for older cars are anticipated to boost EV sales by improving affordability and accelerating fleet renewal, aligning Italy more closely with the EU’s transition trajectory.
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- The Italian government's announcement of new incentives, including €600 million from the National Plan for Recovery and Resilience (PNRR), aims to promote battery electric vehicle (BEV) adoption.
- These incentives include subsidies of up to €10,000 for private buyers who scrap older cars to encourage electric vehicle (EV) uptake and offset the higher initial cost of such vehicles.
- The shrinking and aging car market, low EV adoption, and delayed regulatory push in Italy have created challenges, but the new incentives are expected to help align Italy more closely with the EU’s transition trajectory towards greater adoption of electric-vehicles (EVs) in the industry and lifestyle.
