ROME (Reuters) – Italy will provide 950 million euros in subsidies this year to help drivers switch to less polluting cars and boost the auto sector, the industry ministry said on Thursday.
The incentive comes as Italy’s right-wing government is in conflict with Stellantis over the auto group’s domestic production levels.
The President of the Italian Council Giorgia Meloni declared last week that Stellantis, parent company of the Italian manufacturer Fiat but also of Peugeot, had sometimes acted against the national interest.
Rome will provide up to 13,750 euros in subsidies to help lower-income households buy a new fully electric vehicle costing up to 35,000 euros excluding VAT.
Part of the subsidy is linked to the scrapping of a car with a polluting combustion engine.
The same households will also be able to benefit from a subsidy of up to 10,000 euros for a new plug-in hybrid vehicle costing up to 45,000 euros.
Ultra-modern combustion engine vehicles will also be able to benefit from smaller subsidies.
This spending is an integral part of a large program of more than 8 billion euros aimed at supporting the automobile industry over several years, announced by Rome in 2022.
The Italian government and Stellantis, Italy’s only major automaker, have been in talks since the summer about a long-term plan to reverse the decline in production.
The aim of the plan is to increase Stellantis’ annual domestic production to one million vehicles, compared to around 750,000 vehicles manufactured in 2023.
Stellantis Chief Executive Carlos Tavares said last week that Italy was spending less than other major European countries to support the development of electric vehicles and that this approach was holding back production.
On Thursday, Industry Minister Adolfo Urso suggested that the Italian government take a stake in the capital of Stellantis, in the same way as the French state which owns 6% of the car manufacturer resulting from the merger in 2021 between PSA Peugeot- Citroën (PSA) and Fiat Chrysler Automobiles (FCA).
“If Tavares argues that Italy must do the same as France, which has increased its active investment in Stellantis, then they can ask for it. We can discuss it together,” he told reporters.
(Reporting by Giuseppe Fonte, with contributions from Giulio Piovaccari in Milan, written by Keith Weir; by Stéphanie Hamel, edited by Blandine Hénault)
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