Italy plans to offer subsidies of up to €6,000 (R96,000) to buyers of new low-emission vehicles and will increase taxes on new petrol and diesel cars, two government officials said this week.
Concerns over climate change are pushing European lawmakers to tighten emissions regulations, but the car industry says that would harm its competitiveness.
Italy's lower house budget committee approved an amendment to the 2019 budget introducing a bonus for people who buy a new electric, hybrid or methane gas-powered car from January 1.
If approved, the incentives will run until 2021 and total up to €300m a year.
Under the same measure, purchases of new cars running on traditional fuels will be subject to a surcharge of up to €3,000 based on the level of carbon emissions produced.
"It will become more and more attractive to buy less polluting cars," said infrastructure undersecretary Michele Dell'Orco and industry undersecretary Davide Crippa in a statement.
Dell'Orco and Crippa are both members of the anti-establishment 5-Star Movement which is keen to phase out fossil fuels and promote the use of electricity generated from renewable sources.
Italy is currently locked in a battle with Brussels about its planned deficit spending policies.
Electric, hybrid and methane gas-powered cars made up 7% of Italy's car sales last month, according to data provided by foreign car manufacturers association Unrae.
However, Italy's main car manufacturer Fiat Chrysler does not sell any electric and hybrid cars at present in Europe.
The company said last week it planned to spend more than ?5bn on new models and engines in Italy between 2019 and 2021, focused on the development of electric and hybrid engines.
The head of the Italian car sector's association Anfia, Paolo Scudieri, asked the government not to incentivise sales of electric cars, saying EU lawmakers were negotiating emissions targets that were "unreasonable" in terms of timing and application.
Germany said in October it wants carmakers to offer owners trade-in incentives and hardware fixes to reduce pollution from diesel vehicles.
Daimler said it was prepared to participate in the retrofit programme and offered incentives of up to €10,000 for those swapping old cars for new Mercedes models.
BMW also said it would offer a trade-in incentive of €6,000 in the most polluted parts of the country.
France's Renault said it was offering owners of older diesel vehicles in Germany incentives of up to €10,000 if they bought new cars.
Reuters..