Originally published on opportunity:energy.
There is no sign of relief for the ongoing EV crisis in Europe’s fourth largest auto market. As the rest of the continent continues to enjoy an increasing share of plug-in vehicles across all major countries, Italy is showing a worrying pullback, whose causes — as ever — are also political.
Nissan Ariya
The latest monthly stats by UNRAE update an already uncertain scenario with even more troubling figures. The car market actually rebounded soundly from last year’s levels, with over 72,000 registrations, marking an anti-cyclical 10% increase year-on-year (YoY) in what is traditionally the slowest month of all. Conventional internal combustion engine (ICE) vehicles saw mixed results: petrol powertrains regained ground, reaching 26.7% (up from 24.9% a year prior), while diesels retreated to 18.2% (down YoY from 21.6%). Plug-less hybrids, however, were the big winners. At 39% market share (up from 31.5% last year), they greatly increased their lead over other technologies, thus consolidating a year-long trend.
And now for the bad news. Full electric cars only managed 2,304 registrations for the month, down a whopping 29% from the 3,254 units recorded in August 2021. BEVs slipped therefore to 3.2% market share, down from last year’s 5%. This is a grim followup to July’s poor performance, which had come as a bit of a surprise after the launch of a new long-term incentive package for low-emission cars. This had given hope for sustained high market share for plug-ins in June, but it turned out to be a short-lived reversal of 2022’s negative trends.
Plug-in hybrids shared a similar fate to full electrics, but once again managed to score a better performance. With 2,721 registrations, PHEVs “only” lost 16% YoY (compared to 3,243 registrations in August 2021). Market share slipped to 3.8% from 5% a year ago. The ongoing relative popularity of PHEVs over BEVs helped combined plug-in vehicle market share reach the 7% mark, which nonetheless makes this the worst month so far for plug-ins in 2022, and a substantial dip YoY from the 9.9% share achieved 12 months before.
How’s such a negative trend possible following the recent launch of new financial incentives for EVs? There are certainly economic and logistical causes behind this inflection. Italy is sailing toward uncertain times, with a likely recession in the coming winter, so consumer spending is already starting to focus on essential items and cutting off anything that can be postponed to better times. But there is also a broader geographical element, whereby volume allocation and deliveries of electric cars are being focused by automakers towards the most receptive and stable regions of Europe, such as Germany, France, the UK, and Scandinavian countries. All of this gives Italy a “Tier 2” status in the Old Continent.
There is, however, a further, political element to this puzzle. Whilst it is true that the Italian government finally launched a new, tighter incentive scheme for low-emission cars in June, which had seemed to pave the way for long-term stability of government policy, new changes were introduced on paper in early August, but not yet signed off into law, which inevitably cooled off EV purchases. While the idea was admirable — increasing existing incentives by 50% for lower income households — the timing and execution will inevitably have had a negative impact, at least until the new rules are set in stone. With a new government now about to settle in Rome in October, chances are we have not seen the end of this.
As electric mobility struggled to stay afloat through the summer in these cold headwinds, the August top 10 BEV chart should perhaps be dubbed “survival of the fittest.”
The Fiat 500e once again led the pack, albeit at greatly reduced levels. With just 360 registrations — fewer than half the units from a month before — the Italian mini still managed to treble the volumes of runner-up Smart ForTwo, stuck at 128 units. A fairly typical, if deflated, A-segment podium was completed by the Renault Twingo ZE with 114 units. These top performances, in other months, would have granted mid to low rankings at best.
A few surprises followed, such as the Model Y in sixth place, closely tailing the VW ID.3 (while the Model 3 was still missing in action). The brand new Nissan Ariya SUV made its Italian debut in ninth place. A potential competitor to the Y and ID.4 in the slowly growing upper segments, it will have to be seen if the latest Japanese model can enjoy some level of success in Italy’s difficult arena. The VW ID.3’s Spanish sibling, the Cupra Born, closed out the chart with its second consecutive presence in the top 10.
As choice and competition across all EV segments grow rapidly, Italy’s market seems to be suddenly turning away from the swift progress made in recent years. Global automotive headwinds have been compounded here by a set of noticeable obstacles. Economic downturn and political uncertainty — most likely to be fueled by the upcoming government change — pose a major threat to the upward trajectory of local EV adoption, at least in the mid term. The next few months may prove crucial to determine which direction Italy’s auto market is going to take.
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