
A declining start for the car market
The Italian car market has started 2025 on a downward trend. In January, 133,692 cars were registered, marking a loss of over 8,300 units compared to the same month in 2024, a drop of 5.9%. The economic outlook remains uncertain, and the slowdown in sales in the last quarter of 2024 has led to a downward revision of annual forecasts, now predicting 1.55 million registrations, 0.6% less than the previous year. This figure remains 19% lower than pre-pandemic levels in 2019, raising concerns about the market’s recovery.
Electric transition stalled without incentives
The performance of electric vehicles highlights the sector’s ongoing challenges. The share of battery electric vehicles (BEVs) dropped to 5%, down from 5.5% in December. Compared to January 2024, the growth seems deceptive, as last year the BEV share had collapsed to 2.1% due to the expectation of incentives. However, in 2025, the government has made it clear that no incentives will be provided, creating further uncertainty.
Plug-in hybrids (PHEVs) are also struggling, reaching only 3.6% of total registrations. The overall share of electrified vehicles (ECVs) remains stagnant at 8.6%, proving that the green transition requires stronger policies and support to take off.
The EU seeks solutions for the automotive industry
On January 30, the European Commission launched the “Strategic Dialogue on the Future of the European Automotive Industry,” aimed at defining an action plan to support the sector, with a final strategy expected by March 5. Key topics include:
- access to talent and resources;
- technological innovation;
- industry regulations;
- next-generation vehicle development.
For now, the Commission has confirmed the 2035 deadline for phasing out internal combustion engine sales. However, ACEA, the European Automobile Manufacturers’ Association, has called for urgent measures, such as CO2 emission penalty reviews, EU-wide incentives, and a better management of trade tensions with the US and China.
UNRAE calls for tax reforms for company cars
In Italy, UNRAE is pushing for urgent tax reforms on company cars. According to its president, Michele Crisci, the current system is disadvantageous compared to other European countries and must be revised to promote sustainable mobility. Key requests include:
- reducing depreciation periods to 3 years;
- VAT deductibility and expense deductions based on CO2 emissions;
- a fringe benefit revision, which currently favors even high-emission vehicles.
Without proper measures, the green transition may suffer further setbacks, preventing the renewal of the vehicle fleet.
Conclusion
Italy’s car market is facing significant challenges. With no incentives and an uncertain regulatory framework, the shift to electric vehicles remains difficult. UNRAE and industry groups are calling for decisive action to support the sector.
📢 What do you think? Will the car market overcome these challenges? Share your thoughts in the comments below!