2022 was a year of defeat for electric mobility in Italy. Europe’s fourth largest market struggled to keep up with the rest of Europe’s major auto markets. While EVs made important gains in market share throughout the continent, Italian sales of plug-in vehicles suffered an unanticipated setback.

Editor's Note: This article was originally published on opportunity:energy.

It could have been the year when fully electric cars would surpass the psychological threshold of 100,000 annual units sold. That much could be projected, following a sparkling 2021 when over 67,000 BEV sales had been reached, doubling numbers from the previous year. EV incentives however ended abruptly before 2022 even started, leaving the Italian car market in limbo for several precious months.

Even once a new set of leaner incentives was launched later in May 2022, it was perhaps too little too late. A mix of political ineptitude and consumer uncertainty led to a surprise inversion of the electrification trend in car mobility, the only such occurrence in any significant world auto market.

Official statistics from Unrae show a complex picture, where the overall car market declined 9.5% Year-On-Year (YoY) from 2021, from almost 1.5 million units to just over 1.3 million. Traditional petrol and diesel powertrains, while also declining in absolute numbers, stayed virtually unchanged in terms of market share, at 25.5% and 20.5% respectively (from 26.1% and 20.5% in 2021).

This was in itself out of trend with what is being witnessed elsewhere in Europe, with ICEs plunging to new lows. Plugless, full and mild hybrids (HEVs) increased their sales by 6.4%, which meant over a third of all new cars sold last year in Italy, 34.6% to be exact, were mildly electrified.

Fully electric cars were the truly negative surprise for Italy’s market in this year of uncertainty. BEVs declined by a whopping 26.6% YoY, from over 67,000 units in 2021 to slightly less than 50,000, an unpredictable retreat. While the top three European markets reached new highs, with Germany at 17.7% BEV market share, France at 13.3% and the UK at 16.6%, Italy’s BEV share dropped from the 4.6% of 2021 to an unflattering 3.7% for the whole of 2022.

Much has already been discussed about this phenomenon during past monthly updates. Political indecisiveness, ongoing economic uncertainty and the broader consumers’ unwillingness to dip their toes in a technology that has been frequently blamed by the very Italian government for upending the future of Italy’s automotive industry.

The many facets of last year’s missed BEV growth opportunity will ultimately be resolved once the price equation is aligned with Italy’s market, which has a clear focus on small vehicles at reasonable prices, one of the last steps in the BEV roadmap to mainstream.

Meanwhile, plug-in hybrids managed to overcome a difficult year with steady numbers, about 68,000 units for a negligible 2.7% YoY reduction in absolute sales. Given the wider contraction of the overall car market, PHEVs however gained market share and reached 5.1%, up from 4.7% a year before. The trend first set in 2021, which saw PHEVs overtake BEVs in the Italian auto market, was thus reinforced in 2022. This was yet another outlier amongst major European markets, which saw a general overtaking of plug-in sales by BEVs. Overall plug-ins market share was 8.8%, down from 9.3% in 2021.

The top 10 BEV models for the year were broadly a mix of the usual best sellers for the Bel Paese. One exception stands out.

Fiat 500e won the annual crown of best-selling BEV for the second year in a row, with 6,285 registrations. This is about 40% less than in 2021 (when it broke the 10,000 unit barrier), a worrying sign in the supermini’s home country. Smart ForTwo followed in second place, with a similarly underwhelming performance, at 4,545 units. Tesla Model Y gained its first annual podium, trailing the Smart with 4,276 registrations. This was a great result for an un-incentivized, €50k+ upmarket model in the realm of A- and B-segment cars.

Further down the chart, Dacia Spring was quite the disappointment, with less than 3,000 units, clearly due to scarce supply. A similar fate was followed by the Renault Twingo ZE. Both models halved their sales YoY, and in fact, followed the same downward trajectory as virtually every model in the Top 10. Volkswagen ID.3 perhaps even more impressively lost 55% YoY, compounding an already lukewarm reception the year prior.

The only exceptions were the Mini Cooper SE, slightly increasing sales YoY, and of course, the Tesla Model Y, which literally exploded to third place. Even the Tesla Model 3 could not escape the 2022 curse, so it faded away from the chart altogether. To be fair, this was an issue of Tesla’s own doing, as the D-segment car was burdened by €13k+ cost hikes in the year, which made it an unpalatable option for most buyers.

While 2023 won’t lend itself to good EV news that easily – after all, the economic and political picture hasn’t changed – one external factor could make its own unlikely contribution. Tesla’s January shocking cost cuts brought Model 3 prices back to below where they had started, and the already successful Model Y got its prices shaved too.

With both Tesla models now firmly in a cheaper tier than ever (Model 3 RWD is now even eligible for incentives), a major boost in Tesla sales can be expected in coming months, which will inevitably bump up monthly stats in this ailing EV market. And not just that.

As other automakers take note of Tesla’s move to market domination, at least some will be tempted – or forced – to lower BEV prices instead of increasing them, in the hope of maintaining market share and relevance. With 26,000€ now being the new average price of new cars sold in Italy (mostly ICEs), a low value but also an unprecedented increase from previous years (it was around 21,000 four years before), the difference in costs between old and new powertrains is narrowing down fast.

Tesla might just have offered the first shock that Italy’s EV market needs to get back on track and re-ignite the electric mobility revolution.

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