Can a new support package bolster Italy’s automotive fortunes?

09 June 2026

The Italian new-car market enjoyed another month of growth in May. But can a major new industry funding framework provide a catalyst for further prosperity? Autovista24 content specialist James Roberts assesses the latest industry data.

May underlined a strong first five months of 2026 for the Italian new-car market. In total, 150,043 new passenger cars were registered, according to ANFIA data. This marked a 7.6% year-on-year increase.

Between January and May, a total of 789,802 new vehicles were registered across Italy. This ensured a 9.4% rise in volumes, compared with 12 months prior.

Electric vehicles (EVs), including battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs), continued to flourish in the month.

Conversely, internal-combustion engine (ICE) models, including petrol and diesel variants, pushed on with their trend of decline. Meanwhile, hybrids, made up of full and mild variants, commanded the overall new-car marketplace.

Italy’s sustained growth is significant, helping to ameliorate a sluggish 2025 for the market. Coupled with this, further consumer and manufacturer confidence could be boosted by recently announced funding plans.

Increased automotive industry support confirmed

In May, the Italian government approved the Automotive Prime Ministerial Decree (DPCM). This €1.34 billion fund is aimed at supporting companies in the automotive supply chain, including production investments, research, and innovation.

The government also indicated that approximately €251 million, previously diverted to temporary fuel-price measures, will be restored to the fund.

Rather than focusing on specific financing, the DPCM targets wider automotive industry issues, supporting the development of new mobility technologies. It aims to bolster domestic manufacturers in the face of market challenges and increased competition.

Minister of Enterprise and Made in Italy, Senator Adolfo Urso, confirmed the plan aims to support the supply chain’s transformation. This will range from manufacturing components up to advanced technologies for sustainable, connected, autonomous and safe vehicles.

He also emphasised a shift in policy focus from market subsidies towards support for business investment, including research enhancement, aimed at wider industrial growth. More than 70% of the decree’s resources are expected to support innovation agreements.

Caution from automotive observers

ANFIA welcomed the Automotive DPCM. In particular, the body highlighted its focus on supply chain support, including production investment, research, development, and innovation.

Measures to support sustainable mobility and commercial fleet renewal were also welcomed. The association also emphasised the importance of rapid implementation to ensure industry stability.

Meanwhile, UNRAE president Roberto Pietrantonio indicated the need for clarity around the decree’s objectives. He argued that automotive-transition funds should remain focused on long-term industry and fleet renewal measures.

The body president commented that industrial recovery requires broad policies and a stable regulatory framework capable of restoring market confidence.

The association also criticised the diversion of roughly €251 million from the automotive fund to temporary fuel-price relief. Pietrantonio argued that Italy should move past temporary measures and towards a more structural solution.

 Taxation reform for corporate fleets was also highlighted as an important tool to combine decarbonisation and industrial competitiveness.

EV volumes continue to rise

BEV and PHEV volumes continued to rise year-on-year in May. ANFIA highlighted this was mainly supported by private demand.

In total, 13,274 new BEVs took to Italy’s roads. This second-highest monthly result of the year ensured an 86.5% year-on-year increase, carving out an 8.8% market share. This was a 3.7 percentage point (pp) improvement on 12 months prior.

PHEV demand continued to prove significant in May. Overall, 15,164 were registered in the month, a 68.5% year-on-year lift, securing a 10.1% market share.

As a result, EV registrations, including BEVs and PHEVs, reached 28,438 units in May. This meant 19% of all new cars registered in May could be plugged in. As well as a 7.4pp year-on-year lift, it was also the largest monthly share the combined powertrains have achieved so far in 2026.

Hybrid honeymoon cooling?

In Italy, as in the EU, hybrids have long proved the dominant powertrain. However, echoing wider trends, registrations of new hybrid passenger cars showed signs of slowing in May.

Overall, 70,334 new hybrids joined Italy’s car parc last month. Amid a 16.5% uplift in year-on-year volumes, it was the lowest monthly total of 2026. Additionally, it marked the smallest year-on-year volume increase so far this year at 16.5%.

With this apparent cooling, the powertrain accounted for 46.9% of Italy’s new-car market in May. This was up from 43.3% at the same point last year.

ICE down but not out

As EV volumes rose, eating into the dominance of hybrid powertrains, new ICE registrations continued to slide in May.

Total deliveries of petrol and diesel models slumped 18.8%, as 40,869 units left Italy’s forecourts. This reflected a 27.2% market share, down 8.9pp year on year.

There was still demand for new petrol vehicles, with 30,768 units registered in May. This equated to a 14.4% year-on-year volume drop, based on Autovista24 calculations. The fuel type did remain the second most popular fuel type after hybrids, holding a 20.5% share. However, this was down from 25.8% 12 months ago.

As petrol proved a relatively popular new-car option in Italy, diesel continued to drag. 10,101 deliveries, the lowest monthly total for the fuel type in 2026, was underpinned by a 29.6% year-on-year registrations drop.

After five months, diesel’s market share sat at 7%, a fall of 3.1pp. Meanwhile, petrol took a 20.1% share, down 6.5pp. This continued demand for ICE, especially for petrol power, will provide further headaches for electrification in Italy.

Between January and May, the ICE market share led that of EVs by 10.5pp. As 2026 enters its second half, it will be pivotal to assess whether the new decree can help expedite a powertrain shift.

Fiat on top in May

The Fiat Panda emerged as Italy’s best-selling car in May. In total, 8,964 units were registered in the month. This meant that after five months of the year, the compact mild hybrid moved 54,594 units, according to ANFIA.

The Panda’s registrations total was double that of the second-best-selling model in May. The Dacia Sandero claimed that spot with 4,382 units.

After five months of the year, with 23,943 deliveries, the Jeep Avenger ended up as the second most popular new-car option. In May, it landed fourth, with 3,911 registrations, beaten to third by an increasingly pivotal Chinese-developed market disruptor.

May saw another month of eye-catching registrations from the Leapmotor T03. Since its Italian market launch in September 2025, the compact BEV has become one of the country’s most popular EVs. The month saw 4,250 new T03 units reach customers.

This brought the total across the first five months of the year to 19,100. Approaching the mid-point of 2026, it is the fourth best-selling car in Italy.

Meanwhile, the BYD Atto 2 emerged as the fifth best-selling model in Italy during May, with 3,818 registrations. With increased competition from these new Chinese EVs, industry watchers will be keen to see if the new decree impacts the competitiveness of domestic manufacturers.