Incentives and subsidies for new cars in Italy in 2021

The Italian Government will increase incentives for electric cars but also open up funds to fossil fuel vehicles.

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2021 may be the perfect opportunity for a new car in Italy / Photo by Jonathan Bean on Unsplash
14 January 2021, Redaction

Italy's 2021 Budget Law has confirmed support for the automotive sector with a range of incentives and subsidies for new cars in Italy in 2021. In addition to an ecobonus for electric and plug-in hybrid vehicles, bonuses are also envisaged for petrol, diesel, mild or full hybrid engines.

In detail, the 2021 Budget Law allocates 250 million euros to the fund dedicated to car incentives for vehicles with petrol and diesel engines in Italy, while electric engines are allocated 120 million euros. The total is 490 million euros if you also consider the funds provided by the 2019 Budget Law.

The 2021 car incentives and subsidies in Italy apply to brand new cars, but the amount depends on the level of emissions of each car. For this, a division by bands or brackets has been drawn up and the bonus amount also varies depending on the purchase method (with scrappage or not).

The first bracket is for cars with low emissions between 0-20 g/km and benefits from a 10,000 euro ecobonus (8,000 of state incentive plus 2,000 of dealer contribution) in the case of taking advantage of a scrappage scheme in Italy for a vehicle which is classified as Euro 4 or lower. This amount would drop to 6,000 euros (4,000 + 2,000) without scrappage.

The second bracket identified is that for emissions between 21 and 60 grams of CO2 per kilometre, which will receive a 2021 car allowance of 6,500 euros (4,500 + 2,000) with scrappage or 3,500 euros (1,500 + 2,000) without scrapping.

The real novelty of the Budget Law 2021 is the third bracket of car incentives in Italy for cars with emissions from 61 to 135 g/km (the emission limit was previously set at 110 grams per kilometre), which brings many petrol, diesel, mild hybrid and full Euro 6d type-approved vehicles within the scope of the car incentives.

How to access car incentives in Italy in 2021

To benefit from car incentives and subsides in Italy, it is mandatory to scrap a vehicle registered before 1st January 2011, in exchange for a 3,500 euro (1,500 + 2,000) bonus. Cars with emissions between 61 and 135 g/km must have a list price of no more than 40,000 euros net of VAT (about 49,000 euros for a private customer).

For the purchase of vehicles with emissions between 0 and 60 g/km, the price must not exceed 50,000 euros including optional extras, to which VAT and roadside assistance must be added, and must be indicated on the purchase contract and invoice. A different form of 2021 car incentives is envisaged for those with an ISEE (Equivalent Economic Situation Indicator) of less than 30,000 euros. In the case of the purchase of an electric car, there is a bonus of up to 40% of the expenditure incurred, provided that the vehicle costs less than 30,000 euros. This incentive cannot be combined with the ecobonus.

The 2021 car incentives are applied directly in the form of a discount on the price and the purchaser does not have to follow any particular procedure, the dealer will take care of the bureaucratic operations and the bonus will be automatically deducted from the list price of the vehicle.

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