Italy will give hundreds of millions of euros of support to a battery plant in southern Italy planned by Stellantis, the government's industry minister said.
"We are convinced that Stellantis should continue to be engaged in Italy and the gigafactory in Termoli which (Rome) will support with 369 million euros ($420 million) of public money demonstrates this," Giancarlo Giorgetti told daily newspaper Il Sole 24 Ore in an interview published on Thursday, without clarifying the overall investment expected for the plant.
Giorgetti also told the newspaper that Rome could approve as early as Friday a package of 1 billion euros ($1.1 billion) a year -- for at least three years -- aimed at financing incentives for the purchase of low-polluting cars and the conversion of production plants to EVs.
Stellantis declined to comment.
The automaker, formed in January from the merger of Fiat Chrysler and PSA, said its strategy would be supported by five battery plants in Europe and North America, and that one would be at its engine facility in Termoli.
The three-year plan includes incentives and financial support for converting industrial capacity toward more environmentally friendly models, Giorgetti said.
A deal between Rome and Stellantis has not yet been reached, but in an interview on Sunday Giorgetti said an agreement for the battery plant would be signed shortly.
Stellantis, which runs about a dozen plants in Italy, has been hit particularly hard by the pandemic, with a knock-on effect for its network of suppliers.
Stellantis employs about 50,000 workers in Italy.
Although the new measures aim to nudge Italian auto production toward electric vehicles, Rome would still support production of some gasoline, diesel and hybrid cars.
"Helping only on the electric side would be doing a favor to foreign carmakers," Giorgetti said in the interview. "We also need to encourage purchases of cheaper vehicles by less wealthy people."
Italy has been seen as a laggard in EV production, as the government has lobbied the European Union to postpone deadlines for internal combustion phaseout plans in a bid to buoy high-performance automakers such as Ferrari and Lamborghini.
Europe's car industry is in the midst of its worst period for new registrations since the continent's industry association began tracking the market in the early 1990s.
Registrations in the EU, UK and EFTA markets fell 2.4 percent to 822,423 in January compared to last year, data from industry association ACEA showed on Thursday.
Reuters contributed to this report