Dealers say Italy's EV incentives are flawed

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MILAN -- Italy's plan to offer up to 5,000 euros in public funds for buyers of electric vehicles starting on May 6 is a waste of money because the scheme is flawed, Italian dealers association Federauto said.

Last year's eco-incentives flopped because access criteria for companies were impossible and the tiny amount of money available for private buyers is "like using a drop of water to douse a fire," Federauto said in a statement Tuesday.

That's because corporations, including rental, fleet and taxi firms, can only tap the funds if they scrap a car that's at least 10 years old. So it was no surprise that the 5 million euros earmarked for private buyers last year was used up in a few hours, while the 35 million euros or so set aside for corporate buyers was left almost untouched.

As a result, the Italian government is offering 31.3 million euros this year, which added to last year's unused money comes to 63.4 million euros, according to Italian press reports, as well as information available on a ministerial Web site.

"In essence, we have thrown away public money without making the market any bigger," Federauto President Filippo Pavan Bernacchi said.

Italy’s market for electric vehicles is tiny. Sales of electric vehicles in Spain and Italy together totaled just 100 units in February, compared with 544 electric cars sold in Germany that month, according to research group EV Obsession.

Italy’s car market has nearly halved since its pre-financial crisis peak of 2007. The government stepped in 2009 to ease the pain with a scrappage scheme that provided 1,500 euros to a person who scrapped a car that was at least 10 years old and replaced it with a new car that met Euro 4 or Euro 5 emission standards. The program ended in December 2009.

In Spain, France and Germany, governments also helped carmakers cope with the crisis by offering state credit for carmakers in 2009.

Spain started offering scrapping incentives again in 2013 and has extended the program four times since then. The last extension came in January and added 175 million euros to the scheme. Under the program, people who scrap their old car and buy a new one get a rebate of 2,000 euros, half from the government and half from the carmaker.

Italy’s eco-incentive plan links payments to emissions levels. The government will contribute 20 percent of the price for any “green” car, but for car with fewer than 50 grams of CO2 per kilometer, like a Toyota Prius, the Italian state will offer up to 5,000 euros, according to the ministry. For a car emitting 95g/km, the state’s payment is capped at 4,000 euros, and at 2,000 euros for a car emitting 120g/km.

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