In a twist, Fiat could add gasoline engine option to 500e

TURIN – Fiat could add a mild-hybrid gasoline engine to its 500e minicar, which is now available only as a full-electric model, people familiar with the issue said.

Early this month, Fiat asked suppliers for quotations to increase production of the 500e at Stellantis’ Mirafiori factory to 175,000 units annually from the 77,260 that were built in 2023. The news of the potential conversion was first reported by Il Corriere della Sera and confirmed to Automotive News Europe by suppliers.

Of that total, 100,000 would be gasoline models, the suppliers said on condition of anonymity to disclose confidential information, and because Fiat has not yet decided whether to proceed.

The move to convert a car designed to be electric-only to internal combustion would be highly unusual, not the least because Fiat already sells a gasoline-engine 500, although it predates the 500e by more than a decade and is slightly smaller. That model, on the market since 2007, is built in Tychy, Poland.

Adding a gasoline version of the 500e to Mirafiori could ease unions’ fears about declining volumes of the 500e, as well as help satisfy the Italian government’s goal of maintaining the country’s auto production at no less than one million per year. Stellantis is the only volume manufacturer in Italy.

Last year, Fiat sold more than 104,000 gasoline 500s and more than 62,000 500es in Europe, according to figures from Dataforce.

Production of a mild-hybrid 500e, powered by the 1.0-liter, 70 hp FireFly gasoline engine used by the ICE 500 and Fiat’s other minicar, the Panda, could start no earlier than late 2025 or early 2026, industry sources told ANE.

A Stellantis spokesman did not deny that the letter was sent to suppliers but declined to comment further.

The potential move is driven by a combination of factors.

The first is internal. Fiat, with a target of being an electric-only brand in Europe by 2030, has decided not to upgrade the current 500 ICE model to comply with new EU safety and cybersecurity rules that will come into force in July. Instead, it will revamp to Panda to comply and keep the model in production until at least 2027. 

The Panda would be Fiat’s ICE minicar, while the 500e would cover the minicar segment for EV buyers.

The second is external. Electric car sales in Europe are slowing due to a combination of higher interest rates, a lack of disposable income because of inflation and cutbacks in EV incentives in large market such as Germany. 

Italian unions worry that lagging demand in Europe for the 500e could lead to Fiat reducing output at Mirafiori to 40,000 to 50,000 from the 100,000 planned for this year, even though the model will also be exported to the U.S.

The 500e, launched in 2020 as the New 500, had a promising start, with production reaching 77,500 in 2022. Fiat had hoped output would reach 90,000 last year, but after demand fell in the second half of the year, production was flat at 77,260.

Fiat has reacted to sluggish sales of the 500e since the start of this year by cutting one of two shifts at Mirafiori in mid-February.

Adding a gasoline engine to the 500e at Mirafiori could help make up for lower sales of the electric version, with the current 500 no longer compliant after July.

Fiat was set to halt production of the current ICE 500 in Poland at the end of April. The model would move to Fiat’s new factory in Tafraoui-Orano, Algeria, which has a capacity of 90,000 units a year. Because it would not be compliant with new homologation rules for Europe, it will be sold in the Middle East and Africa only. 

To build inventories to serve the EU market in the short term, Fiat has decided to extend ICE 500 production in Poland until the end of June and delay the transfer to Algeria, suppliers told ANE. 

If the project is green-lighted, it could take 18 to 24 months to engineer the 500e to accept a gasoline engine, even though the car’s platform is based on the Alfa Romeo MiTo, a gasoline model that was built at Mirafiori, and is built on the MiTo assembly line there. 

That would leave a gap in Fiat’s 500 lineup, with the outgoing gasoline model starting at 17,700 euros in Italy, while the 500e starts at 29,950 euros.

Andrea Malan contributed to this report