Italy has plans for a significant reduction in the funds allocated to support its automotive industry, with a planned cut of approximately €4.6bn ($5bn) between 2025 and 2030, reported Reuters.
This decision comes at a time when the global electric vehicle (EV) market is experiencing a slowdown, partly due to inconsistent policies on green incentives.
ANFIA, a prominent business lobby group, expressed strong disapproval of the funding cuts, deeming it an "unacceptable surprise" that undermines the government's efforts in Europe to enhance sector regulations.
ANFIA managing director Gianmarco Giorda said: "With so many ongoing issues, including transition to electrification, soft market demand in Europe and declining production in Italy, this is not supporting confidence.”
The previous government, led by Mario Draghi, had earmarked €8.7bn through 2030 to bolster the car manufacturing sector.
However, the current budget, presented by Economy Minister Giancarlo Giorgetti, proposes redirecting €4.6bn of the planned €5.8bn for the 2025-2030 period to finance other measures.
The majority of the cuts are scheduled between 2028 and 2030, amounting to around €2.4bn.
Industry Minister Adolfo Urso: "All resources will go into production investments with a focus on components, which is Italy's real strength."
The funding reduction could exacerbate existing tensions between the Italian government and Stellantis, Italy's primary automaker, reported the media outlet.
The government has criticised Stellantis for decreasing its Italian production and transferring some manufacturing overseas.
Stellantis has indicated that its goal to increase Italian production to one million units is contingent on government support, including purchase incentives.
Stellantis CEO Carlos Tavares, in a parliamentary hearing earlier this month, pointed out that Italy's financial support for the auto industry is considerably lesser than that of other major EU countries.
Last week, the company announced an investment of $29.5m in Moving Ground Plane technology at its research and technical centre in Auburn Hills, Michigan.
