Price reductions will likely result in a significant increase in Tesla sales in the upcoming months. Also, the Model 3 is now eligible for incentives.
2022, Bad year for EV Sales in Italy
In Italy, 2022 proved to be a failure for electric transportation. The fourth-largest market in Europe had trouble keeping up with the continent’s other major auto markets. While EVs saw significant increases in market share across the continent, plug-in car sales in Italy experienced an unanticipated decline.
It’s possible it was the year that sales of totally electric vehicles surpassed the psychologically significant milestone of 100,000 per year. Following a stellar 2021 in which over 67,000 BEV sales were made, more than doubling the previous year’s numbers, that much may be predicted. Nevertheless, EV subsidies abruptly ceased before 2022 even got off, leaving the Italian auto market in limbo for a number of crucial months.
Even if a fresh set of more cost-effective incentives was introduced in May 2022, it might have been too little, too late. The electrification boom in automotive mobility unexpectedly reversed, the only instance of this happening in any important global auto market, as a result of a combination of political incompetence and consumer concern.
A confusing picture is painted by official statistics from Unrae, which show a 9.5% Year-On-Year (YoY) fall in the global auto market from 2021 to just over 1.3 million vehicles. Conventional gasoline and diesel engines had slight declines in both absolute numbers and market share, falling to 25,5% and 20,5%, respectively, from 26,1% and 20,5% in 2021.
This stood out as being contrary to what was happening everywhere in Europe, where ICEs were hitting record lows. Plugless, full, and mild hybrids (HEVs) had a 6.4% increase in sales, which meant that more than one-third of all new cars sold in Italy last year, or 34.6%, were mildly electrified.
Italy’s Unpredictable EV market
The biggest disappointment for Italy’s market in this year of unpredictability was fully electric vehicles. BEV sales unexpectedly fell by a staggering 26.6% YoY, from over 67,000 units in 2021 to just under 50,000. While the BEV market shares of the top three European markets, Germany (17.7%, France, 13.3%, and the UK (16.6%) hit new highs, Italy’s BEV share fell from 4.6% in 2021 to an unattractive 3.7% for the entire year of 2022.
This phenomenon has previously been covered in depth in previous monthly reports. The future of Italy’s car sector is in jeopardy due to political vacillation, persistent economic uncertainty, and a general consumer reluctance to experiment with a technology that has frequently been attributed by the Italian government itself.
Once the price equation is in line with the Italian market, which has a clear focus on compact vehicles at competitive rates, one of the last steps in the BEV roadmap to mainstream, the many dimensions of last year’s lost BEV growth opportunity will eventually be resolved.
Stable year for Plug-in Hybrids
While this was going on, sales of plug-in hybrids were stable at roughly 68,000 units, representing a tiny 2.7% YoY decline in absolute sales. Despite the general decline in the market for cars, PHEV market share increased and rose to 5.1% from 4.7% a year earlier. Hence, in 2022, the pattern that began in 2021, when PHEVs surpassed BEVs in the Italian auto market, was furthered.
Tesla Price Drop may Bolster Italy’s EV Scenario in 2023
As the economic and political landscape haven’t changed, 2023 won’t exactly be ripe for good EV news, but one outside force might make an improbable contribution. Tesla’s startling cost reductions in January reduced the price of the Model 3 back to where it had been before, and the already popular Model Y also saw its pricing reduced.
A significant increase in Tesla sales may be anticipated in the next months, which will certainly raise monthly data in this struggling EV industry. Both Tesla models are now firmly in a cheaper tier than ever before (Model 3 RWD is additionally eligible for incentives). Not only that, either.
In an effort to maintain market share and relevance as other automakers take notice of Tesla’s path to market dominance, at least some will be motivated – or compelled – to decrease BEV prices rather than raising them. The cost gap among both old and new drive systems is rapidly closing, with the average price of new automobiles sold in Italy (mainly ICEs) now at 26,000€, a low amount but an exceptional rise from prior years (it was roughly 21,000 four years ago).
The first jolt that Italy’s EV sector requires to get back on track and resurrect the electric mobility boom may have been provided by Tesla.
Follow EAutoArena On Telegram, Twitter, Google News & Youtube