Stellantis pauses production of electric Fiat 500 due to poor demand

ROME (Reuters) - Stellantis said on Thursday it would suspend production of the fully electric Fiat 500 small car for four weeks due to sluggish demand.

The global slowdown in sales of electric vehicles (EVs), partly due to diverging policies on green incentives, has pushed automakers worldwide to adjust their EV plans.

"The measure is necessary due to the current lack of orders linked to the deep difficulties experienced in the European electric (car) market by all producers, particularly the European ones," Stellantis said in a statement.

The 500 is made in the northwestern Italian city of Turin, the birthplace of the Fiat brand, at the historic Mirafiori plant.

The suspension of production will start on Friday, Stellantis said, adding it was "working hard to manage at its best this hard phase of transition".

As part of these efforts, the Franco-Italian group said it is investing 100 million euros ($110 million) in Mirafiori to adopt a higher performance battery and will produce a hybrid version of the 500 electric model, starting between 2025 and 2026.

Unions have long been asking Stellantis to relaunch the Mirafiori site, where output has slumped in recent years, including with the introduction of a new high-volume, cheap car.

"The Mirafiori complex is undergoing a deep transformation, with the aim of making it a true global innovation and development site, a key choice if we are to meet the challenge of the transition to sustainable mobility to which we are called," Stellantis said.

Italy earlier this year launched a $1 billion plan helping drivers switch to cleaner vehicles, with subsidies for purchases of fully-electric cars but Rome and the carmaker have been at odds over the governments approach to incentives.

($1 = 0.9074 euros)

(Reporting by Giulio Piovaccari, writing by Giulia Segreti, editing by Alvise Armellini and David Evans)