Can new BEV incentives save Italy’s new-car market?
11 August 2025
Italy’s new-car market continued its downward spiral in July. Increases in battery-electric vehicle (BEV) and plug-in hybrid (PHEV) registrations were not enough to stop the downturn. Could purchase incentives help trigger a revival? Autovista24 web editor James Roberts investigates.
Italy’s new-car market recorded a third consecutive month of decline in July, according to data from industry body ANFIA. A total of 118,583 new vehicles took to the country’s roads in the month, down from 124,934 one year previously, marking a 5.1% drop.
In the year to date, deliveries amounted to 973,755, down 3.7% when compared to the first seven months of 2024. This represented a deficit of 37,810 new car deliveries.
This performance confirmed the ongoing struggles faced in Italy’s new-car market. It also put the relatively prosperous results recorded in March and April are firmly in the rear view mirror. But what is the key driver of this market inertia?
ANFIA highlighted continued confusion over emissions targets. It said a lack of clarity surrounding government electric vehicle (EV) incentives is weighing ‘like a boulder’ on the market.
Petrol and diesel registrations have continued to decline. Meanwhile, the market share of plug-in vehicles has stagnated, making ‘uncertainty and perplexity in possible buyers’ a serious issue.
Italy’s BEV boost not enough
The trend of increased BEV sales continued in July. Unfortunately, this is no cause for celebration. The 5,864 registered BEVs marked the lowest monthly volume so far in 2025. It also equated to a 37.6% increase of 1,601 more units compared to July 2024.
So far this year, BEVs have captured an increasing market share each month. However, July’s 4.9% market share only amounted to a year-on-year increase of 1.5 percentage points (pp).
Between January and July, BEVs amassed 50,589 registrations, a 29% improvement on the same period in 2024. This translated to a 5.2% market share, up 1.3pp, up from 12 months prior. With BEV deliveries down in June, the year-to-date growth was stunted again in July.
Since a 126.2% BEV registration increase in January, subsequent months have seen growth exceeding 70%. This trend declined in June and July, with year-to-date totals coming in at 28% and 29% respectively.
Italy continues to have one of the slowest EV adoption rates across the major European markets. BEVs have struggled to maintain a monthly market share above 5% in 2025. This has been forged by a variety of factors. A lack of EV charging infrastructure, complex powertrain demands, and the inconsistent rollout of incentives have all contributed.
Clarity key to electrification?
Italy’s government recently announced new incentives to promote BEV adoption. In early August, minister for the environment and energy security, Gilberto Pichetto, confirmed these will be rolled out from September 2025.
Plans include around €600 million being made available from the National Plan for Recovery and Resilience (PNRR). It is hoped this initiative will promote the sale of at least 39,000 EVs by 30 June 2026.
Based on the indicatore della situazione economica equivalente (ISEE), a standard Italian government measure of respective household incomes, Pichetto outlined a tiered system. Contributions of up to €11,000 for consumers with an ISEE of up to €30,000, and up to €9,000 for those with an ISEE between €30,000 and €40,000, were confirmed. For micro enterprises, coverage of up to 30% of the purchase price will be provided, with a limit of €20,000 per new vehicle.
Recent incentives have had positive impacts on the Italian new-car market. April saw triple-digit year-on-year increases for BEV sales. This boost could be attributed to the Ecobonus scheme, re-launched in December 2023 but not coming into effect until June 2024.
Following July’s market outcome, ANFIA highlighted a need for emissions clarity, both domestically and on an EU-wide scale. In particular, the industry body lamented the absence of a definitive revision of CO2 emission guidelines and is requesting a ‘stop-the-clock’ measure pending any concrete outcomes.
PHEVs good but remain marginal
PHEVs enjoyed their second-best year-on-year performance in July. The powertrain recorded 8,789 deliveries and an 83.2% increase in sales compared to 2024. This result was only bettered by May’s sizeable 94.4% upswing.
Kicking off the second half of the year, PHEVs commanded a 7.4% market share. This was up from 3.6pp recorded 12 months ago, the largest monthly slice of the market so far this year.
Spanning January to July, PHEV gains continued to prevail. However, despite continued double-digit increases, the powertrain held a market share of just 5.5% in the year to date. This is up from 3.3% when compared with the 12 months prior.
Italy’s plug-in dilemma
Combining BEV and PHEV registrations, the EV market performance appears positive. July underscored a surge of 61.7%, with 14,653 units registered.
This pushed the market share to 12.4%, up from 7.3%, as registered in July 2024. Looking at the first seven months of 2025, gains are also apparent.
In total, 104,121 BEVs and PHEVs made their way to customers in Italy between January and July. This equalled a 43.4% year-on-year increase, and a positive unit difference of 31,522.
The plug-in market share weighed in at 10.7% seven months into 2025. This is an increase of just 2pp since January, underlining the prevailing stagnation in Italian electrification, voiced by ANFIA.
Hybrid momentum continues
Hybrids, consisting of both full and mild versions, were the preferred choice in July. Impressively, they have held this position every month so far this year. However, the powertrain’s appeal as a possible gateway to full electrification appeared to wane in July.
The month saw the lowest delivery volume so far this year, with 52,496 vehicles hitting the road. Despite this, hybrids accounted for a sizeable 44.3% market share, continuing a consistent trend. This was up from 39.9% when compared with July 2024.
In the year to date, hybrids made up 44.2% of the market and look sure to end 2025 as the most popular powertrain. So far this year, 430,144 hybrid vehicles have been registered in Italy, compared with 393,083 across the first seven months of 2024. This rounds up to a 9.4% increase year on year.
Hybrids continue to prop up electrification
All electrified registrations, combining hybrid, BEV and PHEV deliveries, recorded a 14% year-on-year lift in July. This meant a combined registration total of 67,149 units.
While this is not the lowest figure so far in 2025, it does underpin wider inertia. June’s 7.2% decline highlighted the market’s limits. However, July provided the joint second-worst growth rate and the smallest absolute unit volume. A continued point of concern for the Italian new-car market centres on the reliance on hybrids. The overall electrified market has been inflated by the powertrain.
In the year-to-date, combined electrified powertrains reached 534,265 registrations between January and July. This equated to a 14.7% year-on-year increase. The powertrain grouping made up over half the market at 54.9%, up 8.9pp year on year. As with the monthly market makeup, hybrids kicked off the second half of the year by doing the heavy lifting.
ICE doldrums continue
In lock step with many major European markets, internal-combustion engines (ICEs) have continued to diminish in popularity in Italy.
Petrol-powered cars saw the second largest year-on-year drop, down 22.4%, with 27,849 units shifted. The monthly market share fell from 28.7% 12 months ago to 23.5%. However, this still puts it behind hybrids as the second most popular powertrain.
Spanning January to July, petrol registrations accounted for 25.8% of the market. This was the smallest share for the fuel type so far this year, exposing a wider issue. As petrol’s deliveries dropped by 17.8% in the year to date, the falling volume dragged the overall market down.
Diesel dragging down
A similar narrative continued for diesel models. July saw the fewest registrations this year at 11,571, contributing to a 27.4% year-on-year slip and a market share of 9.8%. Widening the analysis to the first seven months of the year and diesel’s decline was stark.
A 31.6% year-on-year decline marks it as the worst-performing powertrain. This was underpinned by a considerable deficit of 45,512 units compared with the same period 12 months prior.
The combined malaise of petrol and diesel meant the ICE grouping saw registrations hit a new low in July. 39,420 of these cars hit the road, down 23.9%. The year-to-date decline was similar, down 22.2%.
Combined petrol and diesel registrations accounted for 36% of the overall Italian new-car market between January and July. The share fluctuation confirms that while ICE powertrains are melting away, they are proving a stubborn thorn in the side of electrification.
