Tesla prices fall below $35,000 with incentives in Italy

MILAN – This city is well known as an international destination for luxury shopping, but recently it also became perhaps the cheapest place to buy a Tesla Model 3 in Europe. 

Thanks to targeted price cuts by the EV maker and generous national and Lombardy regional incentives, the price of a Model 3 midsize sedan fell to 31,470 euros ($34,500), including VAT, registration and delivery fees.

That puts the Model 3, at least in Milan, at the same price as a low-end Volkswagen Golf compact with a gasoline engine. 

Tesla’s recent deep price cuts across the world have helped it sell a lot of cars at a time when it is ramping up production capacity to more than 500,000 vehicles annually at its huge factories in Germany, China and Texas, with more planned. At the same time, facing competition from lower-priced Chinese-built EVs. CEO Elon Musk has said he wants to sell 20 million cars a year by 2030. 

In Europe, the Model Y midsize crossover was the No. 1 seller overall in the first quarter, ahead of traditional leaders such as the Golf and small cars like the Peugeot 208.

According to trade group ACEA, Tesla’s overall sales in Europe grew by 58 percent in the first quarter in the EU30 area (European Union plus the U.K., Iceland, Switzerland and Norway), compared with an 18 percent increase in total car sales.

Italy’s incentive plan for full-electric vehicles, known as Ecobonus, is available for new cars with a maximum price of 42,700 euros. Buyers are entitled to an incentive of 3,000 euros, plus 2,000 euros if they scrap an old car. The plan was introduced last year, and as of May 8, the plan still had 158 million euros available.

Prices of all Teslas in Italy were higher than the 42,700-euro threshold until a few weeks ago, when the list price of the Tesla Model 3 (single-motor, rear-wheel drive) was lowered to 42,470 euros including VAT, registration and delivery fees. With incentives, the price falls to 39,470 euros, or 37,470 with scrappage.

Last week the government of Lombardy, Italy’s wealthiest region of which Milan is the capital, added its own EV incentives: 1,000 euros, plus 3,000 euros when scrapping an old car; in both cases, the price of the car has to be reduced by 1,000 euros by the dealer, which brings the highest possible rebate to 5,000 euros. These local incentives can be added to the national ones.

Tesla has sent out emails to potential buyers who took test drives, announcing that a rear-wheel drive Model 3 can be bought for as low as 31,470 euros (42,470 euros list price, minus 11,000 euros in national and local incentives with scrappage); the price without scrappage is 37,470 euros.

How does that compare with Tesla prices in other countries? The current price of a Model 3 in France, after deducting a 5,000 euro ecological incentive, is 36,990 euros, or slightly lower than the bottom pre-scrappage price in Italy. 

With a lower government incentive, Spaniards have to fork out 39,760 euros for the same model, while both in Germany and the U.K. prices are even higher: 42,970 euros in Germany for a base Model 3, 42,990 pounds (49,438 euros) in the United Kingdom, where incentives are not available for sales to private customers.

Tesla’s most popular car, the Model Y midsize crossover, does not qualify for incentives in Italy; the base price here is 46,990, higher than in Germany, France and Spain. The price of a Model Y in France is 41,990 euros with incentives.

The purchase price for Teslas, as well as other EVs, can be even lower with scrappage incentives, especially in France, where low-income households and those living in low-emission zones may also increase their incentives – but the Lombardy region, for practical purposes, remains the low-price champion.

While Tesla has benefited across Europe from lower prices and incentive eligibility, the automaker’s sales in Italy have soared, up 279 percent through April to 5,290, of which 3,440  were Model Ys and 1,569 Model 3s; these figures pale when compared with 23,075 Tesla sold in Germany in the same period, or 14,651 in France. 

The new incentives in Lombardy might help Tesla’s cause even more: The region accounts for one sixth of Italy’s population, but more than one fourth of all Teslas sold in the country in 2023.

Potential buyers in the Milan area should hurry up, however. There are just 11.8 million euros in funds available at the regional level, and they also cover cover (less generous) incentives to buy internal-combustion engine cars with emissions of less than 135 grams per km of CO2.