Italy’s government has revealed the key components of the 2024 eco-bonus, primarily targeting low-income households with older vehicles. The budget for this initiative amounts to €950 million by year-end, with subsidies extended to the purchase of “vehicles with low pollutant emissions,” including combustion engines.
The funding allocation includes €793 million for cars, €35 million for mopeds and motorbikes, €53 million for light commercial vehicles, €20 million for used cars, and €50 million for a long-term rental program. Notably, out of the €793 million earmarked for cars, only €240 million will be directed toward purely electric vehicles, with an additional €150 million for plug-in hybrids. The lion’s share, €403 million, is reserved for full hybrids, mild hybrids, and traditional combustion engines emitting between 61 and 135 g/km of CO2.
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The subsidy amount is contingent on the applicant’s income and the emissions standard of the old combustion engine being scrapped. For electric cars, a maximum of €13,750 is granted, subject to an annual income of less than €30,000 and scrapping a combustion engine falling within Euro 0 to Euro 2 emission standards. Generally, the subsidy for a new electric car or fuel-efficient combustion engine is capped at a net list price of €35,000 or €42,700 gross.
However, plug-in hybrids can be subsidized up to €45,000 net or €54,900 gross. The environmental bonus for fuel-efficient combustion engines is capped at €3,000 and requires scrapping, while for battery electric vehicles (BEVs) and plug-in hybrids (PHEVs), bonuses of up to €7,500 are available without scrapping an old combustion engine.
The eco-bonus is set to take effect in March 2024, with a focus on incentivizing low-income households. The goal, as outlined in a government document, is to replace at least 11 million EURO 3 cars or lower-class vehicles, addressing Italy’s aging vehicle fleet, one of the oldest in Europe. Italy’s electric vehicle market share is currently lower than other major European countries.
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The incentive system was presented by Italy’s Industry Minister Adolfo Urso, who also expressed openness to Italy taking a stake in car manufacturer Stellantis. This announcement follows a previous conflict between the right-wing government and Stellantis over production levels in the country. Stellantis has committed to increasing production in Italy, and discussions are underway regarding Italy potentially taking a stake in the car manufacturer, similar to the approach taken by the French government.
