Italian new-car sales have posted another month of growth in May, raising questions about whether a new government funding package can sustain this momentum.
The market delivered a 7.6% year-on-year increase in May, with 150,043 passenger cars registered. This figure pushes the total for the first five months of 2026 to 789,802 units, a rise of 9.4% compared with the same period last year.
Electric vehicles continued to perform well. Battery-electric models led the charge with 13,274 registrations, an 86.5% increase that secured an 8.8% market share. Plug-in hybrids followed with 15,164 units, a 68.5% rise.
The combined total for EVs, including BEVs and PHEVs, reached 28,438 units in May. This represents 19% of the total market and the highest share the segment has achieved so far in 2026.
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Despite the rise of electric options, hybrids remain the dominant powertrain in Italy. In May, 70,334 new hybrids were registered, accounting for 46.9% of the market. This figure was the lowest monthly total for the category in 2026, however, suggesting a potential slowdown.
Conversely, internal-combustion engine vehicles saw a sharp decline. Petrol and diesel registrations slumped 18.8% in May, with 40,869 units sold. The drop dragged the market share for these models down to 27.2%.
Fiat’s Panda emerged as the best-selling car in May with 8,964 units. The compact mild hybrid has been a consistent performer, moving 54,594 units over the first five months of the year. The Dacia Sandero was the second best-selling model, with 4,382 registrations.
Foreign manufacturers are also gaining ground. The Jeep Avenger, with 3,911 sales in May, sits in third place, while Chinese-developed models like the Leapmotor T03 and BYD Atto 2 continue to attract buyers. The Leapmotor T03 has reached 19,100 units sold since its launch in September 2025.
Funding framework approved
Amid these market shifts, the Italian government has approved the Automotive Prime Ministerial Decree (DPCM). This €1.34 billion fund aims to support the automotive supply chain, including production investments and research.
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Minister of Enterprise and Made in Italy, Senator Adolfo Urso, confirmed that the plan targets wider industry issues. The decree is designed to bolster domestic manufacturers against increased competition and support the development of sustainable, connected, and autonomous technologies.
While the government has restored approximately €251 million to the fund—previously diverted for temporary fuel-price measures—industry observers are urging caution. UNRAE president Roberto Pietrantonio emphasized the need for a stable regulatory framework rather than temporary fixes.
He argued that taxation reform for corporate fleets is essential to balance decarbonisation with industrial competitiveness. The association also noted that industrial recovery requires broad policies to restore market confidence.
The plan represents a shift in focus from market subsidies to direct business investment, with more than 70% of resources earmarked for innovation agreements. As the second half of 2026 begins, the success of these measures will be critical in determining whether the Italian market can maintain its current trajectory.