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Italy Sets Goal of 1 Million EVs by 2022

June 26, 2018 0 Comments

Italy’s government has its sights set on an impressive (and expensive) goal: getting 1 million electric vehicles on the road by 2022, which could cost the government $10 billion in incentives.  

In May, the League and Five Star Movement haggled over a contract to govern. In the contract, Five Star inserted a passage on “reductions in gasoline and diesel vehicles,” calling for “incentives to support the acquisition of electric and hybrid vehicles.”

The contract doesn’t set numeric targets, Luigi Di Maio said. Di Maio, the leader of Five Star, went on record with the “ambitious” – and, to some, “unrealistic” – goal of 1 million battery-powered cars by 2022. Such numbers would boost Italy to the forefront of the EV market in Europe.

Di Maio unveiled the plans at a campaign stop last year, touring Sicily in an electrified Nissan. 1 million EVs is “far more aggressive” than other forecasts from auto analysts, but the number eventually made its way to Five Star’s national platform.

Five Star, an “Internet-based, anti-establishment party,” was founded less than a decade ago and was the “biggest vote-getter in the March 4 national elections,” according to Bloomberg.

A spokesman confirmed that the Italian government is indeed working towards the 1 million EV target, but offered no clarification on whether the figure referred exclusively to full-electric models or if it included hybrids. The spokesman also declined to comment on the cost.

Last year, Italians bought 2,600 fully-electric passenger cars out of 2 million total vehicles sold. Including plug-in hybrids brings the number up to 4,800 EVs sold, according to the European Automobile Manufacturers Association. The EAMA estimates that there are fewer than 5,000 fully-electric vehicles on the roads of Italy today.

And therein lies the biggest issue: turning Italy from an “electric car backwater” into a booming EV market – a move that would require the government to roll out incentives that at least matched Norway’s level, which analysts say could cost the government several billion euros. And even that might not be enough.

“If you want 1 million electric cars on Italian roads in the next five years, the only option is huge tax benefits like Norway’s. The government would be looking at incentives of about $10,000 a car, like France,” Promotor research institute head Gian Primo Quagliano said. Even at the $10 billion level, “it still remains almost impossible to get there so quickly.”

Norway is currently Europe’s leader in EVs, where incentives cover tax breaks, exemptions from tolls, free ferry passage, and more. On the electric Volkswagen AG Golf, incentives are as high as €9,000 ($10,400) or €7,000 for the VW Up.

France, which could triple its EV sales to 150,000 by May 2022 according to Bloomberg New Energy Finance, offers incentives of about €10,000 per EV purchase.

According to BNEF, deliveries in Europe’s “less vibrant EV markets” (including France, Germany, and the U.K.) could rise to 354,000 in 2022. And while researchers don’t have estimates pertaining exclusively to Italy, BNEF said in its Long-Term Electric Vehicle Outlook 2018 that the country’s adoption of EVs is “far behind” the rest, and “pulls the average of Europe down.”

The Italian government may need help from Europe’s biggest utility, Enel SpA. The utility plans to invest between €100 million and €300 million to install “up to” 14,000 charging stations in Italy by 2022.

Still, Enel’s EV experience could indicate that reaching the target will be a challenge.

“Developing public infrastructure is much more complicated than we expected. Without clear guidelines from the government and a clear vision, we are left in the jungle,” said Francesco Venturini, head of Enel X, the business unit responsible for EVs. “The automotive industry is getting ready for this change, it would be good to have a common vision from the government.”

While Di Maio’s target of 1 million EVs could be a stretch, Italy is still on track to embrace EVs. Regulators and politicians are pushing for zero-emission vehicles; Rome has plans to ban diesel vehicles starting in 2024, and Milan is also drawing up plans for a future free of diesel.

Additionally, Italian drivers opting for alternatives to combustion engines could help the country shift towards electrification.

Once an EV-skeptic, Fiat Chrysler SpA CEO Sergio Marchionne announced that the company will invest €9 million to develop EVs by 2022. Marchionne expects that fewer than half of all cars sold globally by 2025 will still be fully-combustion powered.

Di Maio applauded Marchionne’s new stance.

“We can finally start our projects, including the 1 million-electric car target,” Di Maio said in a post on Facebook.

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