Stellantis halts Fiat 500 EV production amid sluggish demand

Automaker Stellantis revealed on Thursday that it will halt production of its fully electric Fiat 500 for a month due to low take-ups of the car. The temporary stop, which is set to start this Friday, was as a result of the overall slow down in EV sales globally and inconsistent green incentive policies.

The Fiat 500 electric vehicle that is manufactured at Fiat’s renowned Mirafiori plant in Turin, Italy, has been facing a major issue of low order intake. Although European car manufacturers are struggling, Stellantis admitted that problems including the lack of orders “owing to the severe problems in the European electric car market” led to the move.

To counter this period, Stellatis is putting up EURO 100m (USD 110m) into the Mirafiori plant. This investment will enable the deployment of a higher performing battery and the creation of the full electric version of Fiat 500 EV alongside the hybrid version that is expected to be launched within the fiscal year 2025/2026. It is a part of a wider strategy for the Mirafiori site that has been experiencing slowing down of production in the recent past.

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Unions have been demanding a comeback of the Mirafiori complex, calling on Stellantis to bring new, high-volume, and cheap models to the location. Stellantis elaborated on the future vision of Mirafiori as one of the most important innovation and development hubs for the company with a focus on sustainable mobility.

The suspension comes at a time the Italian government in other policies in the first half of this year launched a USD 1 billion plan to promote low-emission automobiles. Subsidies for fully electric cars form part of this plan. However, there is a clear divergence of opinions between Stellantis and the Italian government regarding the efficacy and application of these incentives.

Stellantis said it is "working hard to manage at its best this hard phase of transition," reflecting the company's efforts to adapt to the evolving market conditions and regulatory landscape.