(Bloomberg) -- The Italian government is considering a €930 million ($1 billion) plan to encourage people to turn in their gasoline or diesel cars and buy electric vehicles instead, according to a draft document seen by Bloomberg.

The package, under discussion by the industry ministry, would include financial incentives worth as much as €13,750 to allow citizens with an annual income lower than €30,000 to scrap their Euro 2 models, which are more than 20 years old, in favor of new electric cars.

The aim, according to the document, would be to “change Italy’s vehicle fleet, which is one the oldest in Europe, with at least 11 million EURO 3 cars or lower-grade vehicles.” The plan would also “support low-income families and the purchase of cars made in the country”.

The plan will be presented at a meeting with representatives of the auto sector on Feb. 1, according to an industry ministry spokesperson.

New-car registrations in Italy increased 19% in 2023 to around 1.57 million, according to transportation ministry data published Tuesday. Italy’s EV market share is lower than in other major European economies.

At the same time, after years of surging sales, signs of slower EV uptake are spreading in Europe. Volkswagen’s Audi is dialing back its EV rollout plans to avoid burdening factories and dealers amid slower sales growth. In October, Mercedes-Benz Group AG’s chief financial officer described competition in the EV space as “brutal” and unhealthy.

The European Union is unlikely to meet its end-of-decade EV targets if the bloc doesn’t improve its industrial policy and automakers fail to roll out cheaper EVs soon, Citi analysts led by Harald Hendrikse said in a note.

--With assistance from Craig Trudell.

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