Big Italian Subsidy Could Jump-Start Slow European EV Sales

By · August 01, 2012

Renault Twizy

The Renault Twizy is undoubtedly quirky, but it's doing well in Europe. (Renault photo)

Italy has become the latest European country planning big subsidies for electric cars, with a three-year plan to give fleet buyers a purchasing incentive of up to US $6,149 (5,000 euros). It’s timely, because European electric car sales haven’t exactly shot out of the gate. The cars are expensive there, and people have some alternatives, including high-mileage clean diesels and state-of-the-art public transit.

Renault told my colleague Brad Berman that by the end of June a total of 11,600 electric cars have been sold in Europe, with an additional 6,000 sales tallied for the French carmaker’s tiny Twizy. If you were expecting green-minded Europeans to quickly surpass SUV-loving Americans in buying electrics, it obviously hasn’t happened yet. But it’s progress: In all of last year, some 13,231 EVs were sold (and 2,537 in 2010).

Buyers Scarce

Many European governments already offer strong incentives, without much yet to show for it. The electric had a .09 market share in Western Europe in 2011, according to the Europe-based Automotive Industry Data. France was in the lead, followed by Germany and Norway. The latter, just barely behind hugely larger Germany, has been a bright spot in the European market. “There are more electric cars per capita [in Oslo] than in any other capital of the world,” said Rune Haaland of users association Norstart.

The Italian plan has passed the transport committee of the Italian Chamber of Deputies, and a vote in the Italian Senate could give it final approval in the next week.

According to UNRAE, the association of foreign car manufacturing in Italy, only 286 electric cars were sold in Italy in the first six months of 2012, though it’s perhaps heartening that June’s sales record of 99 was almost double any previous month. The most successful EV in Italy is the Citroen C-Zero (107 sold so far), followed by the Peugeot iOn (80), the Smart ED (29), the Renault Fluence (18) and Mitsubishi i (7). The Nissan LEAF is sold in Italy, but its sales of 40 cars is nothing to write home about.

Where Are the Italian EVs?

Perhaps if there was a respectable Italian contender—the electric version of the Fiat 500 is coming, but it appears to be a 500-vehicle California compliance car—numbers would be bigger. But the Smart car is a big seller in Italy, and its electric counterpart isn’t getting the public excited. Hybrid numbers are much bigger, with 2,725 sold in the same period as the 286 electrics. The Toyota Auris, a cousin of the Prius, is the hit there (567 sold).

Fiat 500 EV

The Fiat 500 EV is an Italian flag waver, but Fiat/Chrysler CEO Sergio Marchionne isn't showing much enthusiasm for it. (Fiat photo)

Carlo Iacovini, an EV consultant and president of GreenValue in Italy, says that he doesn’t expect the government subsidies to have an immediate impact, but he’s hopeful. “The government is trying to push demand with these incentives, which are specifically aimed at company cars and fleets. I believe today’s numbers are so small that the incentives will not change much,” he said. “But things will be interesting in two years time, when the numbers will be in the thousands of vehicles.”

Iacovini said that the European financial crisis led the subsidies to be scaled back from earlier proposals, but they’re still substantial. ANFIA, the national association of car manufacturers, says that the Italian subsidies will greatly benefit the rental and leasing markets for EVs, especially in cities. The Italian dealers’ association is less sanguine about the plan, because it won’t do a whole lot to reverse the dramatic 25 percent slide in new car sales—which is mirrored across Europe and has become a big headache for companies like Fiat and Peugeot (which are looking at closing plants).

The French government revealed a new set of its own generous green car incentives on July 25. Anyone buying an electric car in France will get a rebate worth about US $8,500, while those who purchase a hybrid car will receive about US $6,900 in assistance. The new subsidies will be available until the end of the year, when the government considers renewing them for 2013.

Renault had taken 16,700 orders for its diverse electric offerings by the beginning of July, with the Twizy in the lead (7,350), followed by the Kangoo Express Z.E. truck (5,100) and the Fluence Z.E. (3,250). These aren’t numbers to put a smile on the face of the ever-optimistic Carlos Ghosn (who wants to see 150,000 Zoe compact EVs sold annually). And they’re not going to help Elon Musk take over the world with electric cars, either. But, just like the cars themselves, the EV industry is slowly moving forward.

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