"We move beyond technological neutrality to embrace technological plurality, which means using all available technologies, but in the field of application where they have proven to be the most effective and efficient. It is time for Italy and Europe to make decisive choices in the automotive sector. The next three years are crucial for shaping the future of the automotive industry, securing substantial market shares, and bringing electric vehicles into the mainstream market. Amid the sector's energy transition and a commercial environment intensified by tariffs, Francesco Naso, Secretary General of Motus-E, an association of automotive supply chain professionals and scholars, discusses with Infra Journal the fragile situation of the global car industry, offering a strategy to invigorate the electric vehicle market in Italy.
What is the state of the art in Europe in the automotive world?
"It is a fundamentally very mature market that has been losing volumes since post-Covid period and is unlikely to recover, also due to significant price growth. At the same time, the average price of electric vehicles is on the decline; however, the price gap with their internal combustion engine equivalents, especially in the lower-end segments, still persists.
A trend that could change?
"It's just a matter of time; prices for electric vehicles are expected to continue to decline as a result of economies of scale and ongoing technological advancements. We will see more and more models below the threshold of 25 thousand euros. Several are already entering the market and will undoubtedly change the scenario in the next 3 to 4 years. "
What is the situation outside the EU?
"China and India are expanding rapidly with vast potential and immense opportunities for electric vehicle adoption. In China, one in two cars has a plug (the so-called new energy vehicles, half of which have no internal combustion engine) and we are talking about a market that exceeds 20 million vehicles, the largest in the world. Therefore, those who had a foothold in China, like the Germans, must accelerate electrification to preserve market shares, because there is strong local competition."
Is there a technological gap?
"Yes, especially at the software level. Based on electrified platforms, the digitisation trend in automobiles is transforming the industry, and the European sector needs to catch up in areas such as software, artificial intelligence, and connected services.
How do tariffs impact this already complex scenario?
"European companies will be affected, but so will U.S. companies. Europe must act like Europe, with a unified response that plays on the game of alternatives and on the search for partners, including in Asia, for the joint development of electrification".
Does the European Action Plan help?
"At the moment it is still an "empty" plan that suggests and advises, recommends, but still lacks a clear strategy. It has no goals, no responsibilities, nor a budget. A plan still focused on technological neutrality, which we can no longer afford. In addition, the management of CO₂ fines has not failed to provide clarity for the industry, which is a fundamental aspect for those who are called upon to make very large investments. We now need a safe and predictable environment."
Can't anything be saved?
The guidelines for streamlined European battery funds, which are independent of investment capex, become significant after production begins for each kilowatt-hour generated. It's a good thing, it means that only those who are really industrially ready with a project that is ready to launch will be able to get the funds."
What is needed at this point?
"We must start discussing which technologies to developed and stop hiding behind technological neutrality, which does not provide clear guidelines to those who must invest in a context where the global technological trajectory is very clear and leads to the electrification of mobility. We have to make a targeted choice and commit to investments."
On which products?
"We need to focus on affordable products, and we have identified a potential target: cars with a range of 400 km, priced under 25,000 euros, and possessing 180 kW of charging power. This would cover all European travel, if supported by an adequate charging network across the continent. Indeed, B-SUVs are in high demand within the market, making their electrification essential.
And how do you increase the market share?
"The Italian market can no longer be at 4-5%; we must focus primarily on company fleets that have more predictable mileage and are often recharged on company premises. After 3-4 years, they also end up on the second-hand market, which is fundamental for developing the adoption of electric vehicles.
How can we move in this direction?
"With taxation. Companies should benefit from the adoption of electric technology with a new deductibility that would have an absolutely sustainable cost for the State."
Does an infrastructure system exist?
"In Italy we are on the right track, even if the work is not yet finished. Certainly, it can no longer be considered a major obstacle to the transition to electric mobility. Private capital is there, huge investments have been made, and the necessary network is being built. By 2035 Italy will be equipped with an infrastructure system that will have between 198,000 and 239,000 public charging points for electric vehicles, thanks to private investments of up to 4 billion euros, along with over 5 million charging points for domestic and corporate use. Of course, the utilisation rate is still too low and this does not help the prices of the recharge (which must repay the asset).
What are the risks of further stagnation?
"We will become a residual market, stuck with the oldest technologies and lacking investments. The industrial risk is huge, extending beyond just the potential failure to sell electric vehicles, as there are other businesses involved, like autonomous driving. Electric and connected mobility is a launch pad for the next-generation robotics industry. "
What are your current estimates on electric vehicles?
By 2025, I expect the Italian market share to remain below 10%, while the European market should exceed 15%. In a conservative scenario, we estimate that by 2030, 2.6 million electric vehicles and 1.2 million plug-in hybrids will circulate in Italy. In 2035, there will be 8.6 million and 1.2 million units, respectively. In the context of a future scenario, we estimate a circulating car fleet of 3.6 million electric vehicles and 1 million plug-in hybrids by 2030, which will rise to 10.4 million and 1 million units respectively by 2035. "