Stellantis hits the brakes on Fiat 500e production

Stellantis, the automotive giant behind brands like Fiat, Chrysler, and Peugeot, is temporarily halting production of its all-electric Fiat 500e. The reason? A notable dip in demand for its electric city car, a trend that's sending ripples through the industry.

This isn't just a Fiat problem. While many outlets would like you to believe the global EV market is experiencing a slowdown, the truth is far more complicated. Many manufacturers blame the apparent slowdown on the patchwork of green incentives and policies across different regions. Stellantis has acknowledged this, stating that the production pause is directly tied to the "deep difficulties" faced by European automakers in the EV space.

The Fiat 500e, a charming electric city car, is manufactured at the historic Mirafiori plant in Turin, Italy, the birthplace of the Fiat brand. The production suspension, set to begin on September 13th, will last for four weeks. Stellantis assures everyone that it's working diligently to navigate this challenging transition phase.

While Fiat is quick to blame local politics and lack of incentives, some other brands seem to struggle with the growing demand for their EVs. A quick look at prices might reveal the underlying problem. A Fiat 500e with a 42 kWh battery pack starts at $41,000 in most of the European markets. The latest Kia EV3, with its smallest 58.3 kWh battery, starts at $42,200. That's a much bigger vehicle with better range and better performance.

Similar in size and performance to the 500e is the Citroen e-C3. This little French city dweller starts at $27,300, undercutting the Fiat by eye-watering $14,100. It seems that at some point, Fiat decided to become an upmarket brand. Unfortunately, it forgot to tell its customers about it. And customers were very quick to leave Fiat painful feedback by voting with their wallets.

But it's not all doom and gloom. Stellantis is investing a substantial $117 million into the Mirafiori plant to accommodate a higher-performance battery. Additionally, plans are in motion to introduce a hybrid version of the 500 electric model between 2025 and 2026. That looks already like a misguided choice, with Fiat very likely to perform another U-turn in the near future.

Unions have been advocating for Stellantis to revitalize the Mirafiori site, which has seen a decline in output in recent years. The hope is to introduce a new, high-volume, affordable car to the plant's production line. Stellantis seems to be on board, stating its intention to transform Mirafiori into a "global innovation and development site," a crucial step in meeting the challenges of the shift toward sustainable transportation.

Italy itself has stepped up to the plate with a $1 billion plan to encourage drivers to adopt cleaner vehicles. The plan includes subsidies for full-electric car purchases. However, there's been some friction between Rome and Stellantis regarding the government's approach to incentives.

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