Italian Prime Minister Giorgia Meloni has announced plans to reduce funding for the country’s automotive industry by approximately 4.6 billion euros (USD 5 billion) as part of the upcoming budget for 2025-2030. This decision has triggered widespread criticism from industry stakeholders amid a global downturn in electric vehicle (EV) sales.
The cut contradicts ongoing efforts by the Italian government to bolster the automotive sector and enhance regulatory frameworks at the European level. The business lobby group ANFIA expressed strong disapproval, calling the move an “unacceptable surprise” that undermines confidence in the industry. ANFIA’s Managing Director, Gianmarco Giorda, highlighted the pressing challenges facing automakers, including the transition to electrification and declining production rates in Italy.
The previous government, led by Mario Draghi, had allocated 8.7 billion euros to support the automotive sector through 2030. However, the new budget proposal, presented by Economy Minister Giancarlo Giorgetti, indicates a plan to redirect 4.6 billion euros from the 5.8 billion euros initially set aside for the automotive industry. The majority of the cuts, approximately 2.4 billion euros, are expected to occur between 2028 and 2030.
The opposition Democratic Party (PD) has seized on the news, demanding the resignation of Industry Minister Adolfo Urso. PD lawmaker Vinicio Peluffo criticised Urso, claiming he lacks the capability to manage the situation effectively.
In response to the backlash, Urso emphasised his commitment to providing the automotive supply chain with the necessary tools to navigate the green transition. He assured that resources would focus on production investments and components, which he identified as Italy’s core strengths.
The proposed funding cuts could exacerbate tensions between the Italian government and Stellantis, the country’s only major automaker. Stellantis has faced criticism for its declining output in Italy and for shifting production of iconic brands like Fiat and Lancia abroad. CEO Carlos Tavares previously noted that the company’s goal of raising Italian output back to one million units is contingent upon continued government support, including purchase incentives.
As the automotive industry grapples with these challenges, global competitors like Volkswagen have also announced major restructuring plans, including factory closures and significant layoffs, underscoring the urgent need for strategic support in the sector.