Stellantis will stop production of its electric Fiat 500 for four weeks due to a lack in orders from Europe.
The Franco-Italian firm, which owns Citroen Vauxhall Peugeot, announced that production will be suspended on Friday.
Carmakers have been forced to adjust their plans for EVs due to a global slowdown of sales. This is partly because different policies are in place regarding green incentives.
Stellantis stated: “The current lack of orders is due to the profound difficulties that all European [electric] car producers are experiencing on the European market, especially the European ones.”
The Mirafiori Factory in Turin, north-west Italy is the home of the Fiat 500.
Stellantis stated that it “worked hard to manage this difficult phase of transition at its best”.
The company will invest €100m (£84m), which is equivalent to £84m, in Mirafiori that was founded in 1939. They are adopting a battery with a better performance and will be producing a hybrid model of the 500 between 2025-2026.
The unions have been urging Stellantis for years to renovate the site where production has dropped in recent times by building there a new, high-volume and cheap car.
The company stated that “the Mirafiori Complex is undergoing a profound transformation with the goal of making it a truly global innovation and research site. This will be a crucial choice for us if we want to meet the challenges of the transition to sustainable transportation to which we have been called.”
Italy announced a $1bn program to encourage drivers to switch to cleaner cars this year. The plan includes subsidies for the purchase of fully electric vehicles. Rome and Stellantis disagreed over the government’s incentive policy.
After the EU placed tariffs ranging between 17.4% and 37.6% on the imports of Chinese EVs in June, there are fears that a trade war will break out. Both sides failed to agree on the “unfair” Beijing subsidies that were deemed by the European Commission.
As a sign that Europe is becoming more divided, Pedro Sanchez, the Spanish Prime Minister, has called for the EU to reconsider the tariffs it imposes on Chinese electric vehicles. He said it was crucial to reach a “compromise between the EU and China.
“I must be honest and blunt… I believe we all need to reconsider our stance towards this movement, not just the member states but also [the European] Commission. “We don’t want another war. In this case, a trade conflict,” Sanchez said on Wednesday during a trip to Kunshan, near Shanghai.
China is the world’s leading producer of electric vehicles, and its uptake has skyrocketed. In 2022, China’s electric vehicle sales increased from 1,3m to 6,8m. This represents more than a third of all EV sales worldwide. China has also been the largest single emitter of carbon in the world.
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