VAT deductibility to push electrics

It has caused a stir, if not a scandal, that in the ranking for the share of electric cars in registrations in Western Europe, Italy is firmly at the bottom. If we then look at Italy's share of the car fleet, the situation is even worse. Italy's car fleet has been growing for some years now despite the fact that our population is, as is well known, declining. In particular, on 31 December 2024, according to the Italian Automobile Club (ACI), there were 41,340,516 cars circulating in Italy against a population of 58,934,000, with a motorisation rate, i.e. a ratio of circulating fleet to population, of 0.70 cars per inhabitant. A top figure worldwide. However, if we consider the electric motorisation rate, i.e. the ratio of electric cars in circulation to population, we see that there are 0.0047 electric cars per inhabitant. It gets even worse if we consider the commercial electric motorisation rate (i.e. electric cars used in fleets); the picture becomes even bleaker because this rate is 0.0019 'commercial cars' per inhabitant.

Given this situation in recent months, it was legitimate to expect that the next incentives would devote special attention (and resources) to the purchase of electric cars by fleets. This is also in view of the fact that fleet cars have at least seven times the annual mileage of private cars, and so in terms of environmental benefits, including an electric car in a fleet makes a contribution seven times greater than including an electric car used by a private individual in the national fleet. As a matter of fact, the incentives we are talking about today can only be accessed by company fleets to a very limited extent.

One way to remedy this, if the government wanted to, however, there would be. It would be enough for it to establish full VAT deductibility for electric cars, which currently do not benefit from it in Italy. It would be a first step to begin to demolish the non-deductibility of VAT on cars, which is a real scandal as there is no similar situation in any EU country. The issue is well known, but sooner or later our country must decide to become 'equal' to others in the European Union also for the tax treatment of cars. The non-deductibility of VAT runs counter to the logic behind this tax and the need for our companies to fight on an equal footing with the rest of the European Union also from a tax point of view. The scandal of VAT non-deductibility for cars has been going on for decades and it is time for it to end.