Italy offers subsidies to boost green vehicle sale


Italy will offer subsidies of up to 6,000 euros or $6,820 to buyers of new green vehicles while slapping taxes on the purchase of larger petrol and diesel cars, Reuters reported.

The measures on green vehicle industry are the main part of the 2019 budget in Italy. Italy’s upper house on Sunday approved these changes to rules. Italy’ lower house of parliament is expected to approve the 2019 budget this week. Italy’s ruling parties – the anti-establishment 5-Star Movement are supporting the new guidelines.

Unions and auto sector associations have warned about the proposed new tax, saying it could hurt carmakers and the entire supply chain and could cost jobs. Italy’s right-wing League also opposed any new taxes on cars.

In their new form, the taxes proposed for cars running on traditional fuels will no longer apply to small family cars but only to larger high-powered vehicles, including SUVs.

A tax of 1,100 euros will be slapped on new petrol and diesel cars that generate 161-175 grams of CO2 emissions per kilometer. That will rise to 1,600 euros for emissions of 176-200 and to 2,000 euros for emissions of 201-250.

Incentives for electric and hybrid vehicles, meanwhile, will vary according to emissions generated and will not apply to models that cost more than 50,000 euros ($57,000).

The new measures, which still need to be approved in the lower house, will come into effect on March 1 and last to the end of 2021.

Electric, hybrid and methane gas-powered cars currently make up only around 7 percent of Italy’s car sales.

Italy’s Fiat Chrysler, which at present sells no electric or hybrid cars in Europe, said in November it was planning to spend more than 5 billion euros on new models and engines in Italy between 2019-2021.

In December, in reaction to the original measures, Fiat said it could review its Italian investment plan if Rome raised taxes on petrol and diesel cars. Fiat has not commented since changes to the original proposals were made.