Originally published on option: energy.
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 car markets. While electric cars gained significant market share across the continent, Italian sales of plug-in vehicles suffered an unexpected setback.
This could have been the year that full electric cars would surpass the psychological threshold of 100,000 annual units sold. That much could be expected after a sparkling 2021, when over 67,000 BEV sales were reached, doubling from the previous year. However, EV incentives ended abruptly before 2022 even started, leaving the Italian car market in limbo for several precious months. Even when a new set of leaner incentives was launched, later in May 2022, it might be too little too late. A mix of political ineptitude and consumer uncertainty led to a surprising reversal of the electrification trend in automotive mobility, the only such occurrence in any major world auto market.
Official statistics from UNRAE show a complex picture, with the total car market falling 9.5% year-on-year (YoY) from 2021, from nearly 1.5 million units to just over 1.3 million. Traditional petrol and diesel engines, while also declining in absolute terms, remained largely unchanged in terms of market shares at 25.5% and 20.5% respectively (from 26.1% and 20.5% in 2021). This in itself was out of trend with what is being witnessed elsewhere in Europe, where ICEs plunged to new lows. Plugless, full and mild hybrids (HEVs) increased their sales by 6.4%, which meant that over a third of all new cars sold last year in Italy, 34.6% to be exact, were mildly electrified.
All-electric cars were the really negative surprise from Italy’s market in this year of uncertainty. BEVs fell by a whopping 26.6% YoY, from the 67,000-plus units in 2021 to just under 50,000, an unpredictable retreat. While the top three European markets hit new highs, with Germany at 17.7% BEV market share, France at 13.3% and the UK at 16.6%, Italy’s BEV share fell from 4.6% in 2021 to an unflattering 3 .7% for the whole of 2022.
Much has already been discussed about this phenomenon during the last monthly updates. Political indecision, persistent economic uncertainty and the reluctance of wider consumers to dip their toes into a technology that has often been blamed by the Italian government itself for changing the future of Italy’s car industry. The many facets of last year’s lost BEV growth opportunity will ultimately be resolved once the pricing equation is aligned with Italy’s market, which has a clear focus on very small vehicles at reasonable prices, one of the final steps in the BEV roadmap to the mainstream.
Meanwhile, plug-in hybrids managed to overcome a difficult year with stable numbers, around 68,000 units for a negligible 2.7% annual reduction in absolute sales. Given the broader decline in the overall car market, however, PHEVs gained share, reaching 5.1%, up from 4.7% a year earlier. The trend first set in 2021, when PHEVs overtook BEVs in the Italian car market, was thus reinforced in 2022. Another outlier among the major European markets, which saw a general overhaul of plug-in BEV sales ‘is. The overall plug-in market share was 8.8%, down from 9.3% in 2021.
The top 10 BEV models of the year were largely a mix of the usual bestsellers for the Bel Paese. One exception stands out.
The Fiat 500e won the annual crown as 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. The Smart ForTwo followed in second place with a similarly underwhelming performance with 4,545 units. Tesla Model Y won its first annual podium, following Smart with 4,276 registrations. This was a fantastic result for an upmarket, non-incentive €50,000 model in the A and B segment cars.
Further down the chart, the Dacia Spring was a big disappointment with less than 3,000 units, clearly due to tight supply. A similar fate was followed by the Renault Twingo ZE. Both models saw their sales halve year-on-year, effectively following the same downward trajectory as virtually every model in the Top 10. The VW ID.3 lost a perhaps even more impressive 55% year-on-year, compounding an already tepid reception the year before. The only exceptions were the Mini Cooper SE, slightly increasing sales year-on-year, and of course the Tesla Model Y, which literally exploded into third place. Even the Tesla Model 3 couldn’t escape 2022’s course, so it disappeared from the chart entirely. To be fair, this was a matter of Tesla’s own effort, as the D-segment car was saddled with €13,000+ a year cost increases, making it an unpalatable option for most buyers.
While 2023 won’t lend itself to good EV news so easily—after all, the economic and political picture hasn’t changed—an external factor could make its own unlikely contribution. Tesla’s shocking cost cuts in January brought Model 3 prices back below where they started, and the already successful Model Y also had its prices shaved. With both models now stuck at a cheaper level than ever (the Model 3 RWD is now even eligible for incentives), a big boost in Tesla sales can be expected in the coming months, which will inevitably boost monthly stats in this ailing electric market . And not only that.
As other automakers take note of Tesla’s move to market dominance, at least some will be tempted — or forced — to lower BEV prices rather than raise them in hopes of maintaining market share and relevance. Since €26,000 is now the new average price of new cars sold in Italy (mostly ICE), a low value but also an unprecedented increase from previous years (it was around 21,000 four years before), the difference in cost between old and new powertrain alternatives are narrowing quickly. Tesla might just have offered the first jolt Italy’s electric market needs to get back on track and revive the electric mobility revolution.
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