French-Italian automotive giant Stellantis has announced a four-week halt in the production of the Fiat 500 electric model due to weak demand.
This move comes as numerous electric vehicle manufacturers face declining customer interest in Europe.
Stellantis, which also owns brands such as Maserati, Opel, Citroën and Peugeot, produces the Fiat 500 EV at its Mirafiori plant in Turin.
The company has also announced a significant transformation and investment of 100 million euros into the Mirafiori factory. This investment is expected to be directed towards developing a hybrid version of the currently all-electric model.
The decision is a response to the ongoing downturn in the European electric vehicle (EV) market, which has particularly impacted European EV manufacturers struggling to compete with their Chinese counterparts.
Several European EV and battery manufacturers are adjusting their production and expectations to accommodate the reduced demand expected in the coming months. This challenge is not unique to European producers, as global green incentive policies have also created obstacles for international EV manufacturers.
The EU recently imposed higher tariffs on Chinese EV manufacturers, accusing Beijing of unfairly subsidizing these companies, enabling them to sell vehicles in Europe at prices significantly lower than their actual cost.
However, this decision may have adverse effects on the EU’s goals for zero greenhouse gas emissions, as Chinese vehicles have been popular among EU EV owners due to their affordability.
Further decline in the U.S. market
Stellantis has reported disappointing financial results, with reduced profits in the first half of 2024 as its market share in North America continued to decline.
The company recorded a net revenue of 85 billion euros in the first half of the year, marking a 14 percent drop compared to the same period last year.
Stellantis CEO Carlos Tavares stated that corrective measures were necessary to address economic challenges.
“We have launched an exciting product promotion, with no fewer than 20 new vehicles set to be released this year, which provides greater opportunities when executed well. We have significant work ahead, especially in North America, to maximize our long-term potential,” he said.
