Stellantis suspends Fiat 500 EV production amid declining demand

Stellantis is halting production of the all-electric Fiat 500 city car for four weeks due to sluggish demand, reflecting a broader global slowdown in electric vehicle (EV) sales.

The dip in sales is partly attributed to varying policies on green incentives, forcing automakers to reassess their EV strategies.

"The measure is necessary due to the current lack of orders linked to the deep difficulties faced by the European electric car market, especially for European manufacturers," Stellantis stated.

The Fiat 500e, produced at the historic Mirafiori plant in Turin, will see production paused starting Friday.

Stellantis is grappling with the challenges of this transitional phase, but it is also investing €100 million to upgrade the plant which will introduce a higher-performance battery and a hybrid version of the 500, set to launch between 2025 and 2026.

Despite the initial high expectations for the Fiat 500e, the vehicle has struggled to meet sales targets.

Originally planned for 100,000 units annually, only 20,000 are forecast to be produced in 2024. This marks a significant decline from its peak of 66,000 units sold in 2022.

The drop in production has led to reduced working hours for employees and disruptions to the local supply chain. Over 3,000 workers are on fixed term contracts, with fears that the situation could persist into 2025 if demand for the Fiat 500e remains low.

However, there is hope that the upcoming hybrid and electric versions of the Fiat 500, expected by 2026, may revive the fortunes of the plant and boost production.