Electric vehicle regulation and law in Italy

In Italy, the number of EVs is still minimal, but significant enough to signify a trend among Italian drivers towards sustainable mobility. According to data released by UNRAE (National Union of Foreign Vehicles Representatives), in 2017 the registrations of EVs – including those with zero emissions – increased by 38.6% compared to 2016, 1
http://www.unrae.it/pubblicazioni/book-statistiche-annuali/4089/unrae-book-2017
 making the EV market ever more attractive.

1. What EVs have been deployed in your jurisdiction to date?

Even though EVs currently represent a small portion (0.1%) of the vehicles licensed in Italy in 2017, sales increased in the last year to a total of 1,967 vehicles. Tesla and Nissan lead the EV sales market in Italy, with more than 400 cars sold last year, followed by Renault and Smart. 2
http://www.unrae.it/dati-statistici/immatricolazioni

Even Hybrid vehicles have increased in number, according to official data reported by ANFIA (Associazione Nazionale Filiera Industria Automobilistica), doubling the 2016 figure and reaching a total of 66,000 new registered units. 3
https://www.anfia.it/data/studi-e-statistiche/dati-statistici/mercato-ue-efta/ue%2520efta%2520mercato_autovetture_alimentazione%2520alternativa%25202017.xlsx+&cd=1&hl=it&ct=clnk&gl=it

2. Is there any specific legislation for/regulation of EVs in your jurisdiction?

On 14 January 2017, the Legislative Decree n. 257 of 16 December 2016 – known as the DAFI (Directive Alternative Fuel Initiative) came into force in Italy. The DAFI implements at the national level the Directive 2014/94/EU, on the deployment of alternative fuels infrastructure. 4
http://www.gazzettaufficiale.it/atto/serie_generale/caricaDettaglioAtto/originario?atto.dataPubblicazioneGazzetta=2017-01-13&atto.codiceRedazionale=17G00005&elenco30giorni=true
The main objective of the decree is to reduce the dependence on oil and mitigate the environmental impact in the transport sector.

The DAFI provides that by 31 December 2020, “an adequate number of recharging points” will be made available to the public in Italy. Their number will be determined taking into consideration, among other things, the estimated number of EVs that will be licensed by the end of 2020.

The decree also establishes that when the Italian public authorities’ current fleet of cars, buses and service vehicles, is worn out and needs replacement, the public authorities will be obliged to make sure that at least 25% of the fleet will consist of EVs, hybrid vehicles, CNG (compressed natural gas) and LNG (liquefied natural gas) vehicles.

Furthermore, according to the DAFI, by 31 December 2017, municipalities had to update their building regulations to meet requirements on the deployment of alternative fuels infrastructure. From 1 June 2017, new buildings and those that have been significantly renovated must provide connection points for EV recharging. 5
http://www.mit.gov.it/sites/default/files/media/normativa/2017-03/DECRETO%20LEGISLATIVO%2016%20dicembre%202016%20n%20257.pdf
Currently there are no official data available on compliance with these DAFI building regulations.

3. What measures promote EVs in Italy?

The Italian government provides some incentives for the use and circulation of EVs. These include exemption from the annual circulation tax (ownership tax) for a period of five years from the date the EV was first licensed and, starting from the end of that five-year period, a 75% reduction of the circulation tax.

As an additional push to the deployment of EVs, several insurance companies have started applying discounted rates on EV insurance tariffs.

Ministerial Decree no. 219/2015, which became effective on 1 January 2016 (the so-called “retrofit”), the Italian Ministry of Transport and Infrastructure regulated the possibility to convert conventional vehicles into electric vehicles. 6
http://www.gazzettaufficiale.it/eli/id/2016/01/11/15G00232/sg

There are about 9,000 electric charging points in Italy; around 80% of them are private charging points. Most of the charging points are concentrated in the main urban areas and cities. The PNIRE (National Plan for Electric charging Infrastructure), adopted by the Ministry of Infrastructures and Transport, sets out the following targets for public charging points to be deployed in Italy by 2020:

In some big municipalities, EVs benefit from free parking in urban areas and from free circulation in limited circulation areas (ZTL zones).

4. Who are the main entities (e.g. developers, government, System Operator) and what are their roles in the deployment of EVs in Italy?

  • Local authorities – play a key role in developing charging infrastructures. They set out plans to provide buildings with charging stations, by simplifying and streamlining the authorisation procedures.
  • ARERA – Regulatory Authority for Energy, Networks and Environment, formerly known as AEEG – is an independent administrative authority that regulates and encourages the development of charging infrastructure for EVs. ARERA sets a grid tariff for the private charging of EVs, removing any regulatory constraints that could hinder the deployment of possible charging points in private places and, recently, also a grid tariff for EV public charging. 8
    https://www.arera.it/
  • Electricity market participants – electricity generators, suppliers and distributors.
  • Charging station developers – existing developers of new charging infrastructure, in particular Enel, which manages just under half of the national public charging points.
  • Ministry of Environment – promotes, jointly with the Ministry of Transport and Infrastructure, sustainable urban mobility policies through co-financing programmes for local authorities. In December 2017, the Minister for the Environment set a target, in line with the national production of electricity from renewable sources, to reach a fleet of 5m EVs in Italy by 2030.

5. What are the main challenges to further deployment of EVs in your jurisdiction? How have EV developers sought to overcome these challenges to date?

For Italian consumers, the main challenges to EV ownership include:

  • Cost – EVs are more expensive than petrol- or diesel-fuelled vehicles. The cost is particularly high compared to the average Italian income. The price of the battery significantly affects the final price of an EV. However, significant advances in battery technology are likely to bring EV prices in line with those of combustion-driven vehicles within the next decade, due to estimated decreasing production costs.
  • Charging infrastructure – a well-developed network of charging stations is the key infrastructural factor that would favour a rapid deployment of EVs in Italy. It represents a fundamental prerequisite which would encourage potential customers to purchase an EV instead of a petrol-fuelled vehicle. Although Italy is the fifth country in the European ranking by number of charging points, the spread of charging stations is still fragmented (most of them are concentrated in the north of the country).

Another factor to be considered is the time required to recharge EVs. A significant deployment of the network of fast charging stations all over the national territory would certainly foster a marked increase in demand for EVs.

A further challenge is the absence of full interoperability between the charging infrastructures managed by different operators, which have different charging methods and are not always compatible with every EV model available on the market.

  • Financial support – the government only provides indirect incentives for the purchase of an EV (see paragraph 3 above). However, direct incentives would be necessary to increase the national deployment of EVs.
  • Limited duration of the battery charge – EV batteries have a low average range, around 200 – 300 km for each full charge. Significant advances in battery technology, however, will lead to longer-lasting batteries which are likely to significantly reduce the price of EVs.
  • Education and promotion – it is essential to raise consumer awareness of the positive benefits of buying an EV, both from the economic and environmental perspectives. Currently, given the peculiarities of the Italian EV market, the major car manufactures have not yet focused on any real promotional and awareness campaigns.
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Pietro Cavasola
Managing Partner
Rome
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Matteo Ciminelli
Partner
Rome