FYI: Fiat’s Mirafiori Factory Shuts Down Due to Low Demand for Electric Vehicles
Fiat’s iconic Mirafiori factory in Torino, Italy, is set to halt operations for four weeks beginning this Friday. The reason? A significantly lower demand for their two-door electric vehicle (EV) city car, the Fiat 500e, produced under the Stellantis umbrella.
EV Market: A Bumpy Ride
While electric vehicle sales globally continue to rise, the transition from internal combustion engine (ICE) cars to EVs isn’t as smooth as automakers initially anticipated. Many companies are rethinking their strategies, which includes revamping ICE projects and decelerating their EV rollouts.
Fiat 500e: A Victim of the Market’s Softening
Stellantis recently confirmed the temporary shutdown of its Mirafiori plant, which exclusively manufactures the Fiat 500e. The decision stems from insufficient demand both within and outside Europe to justify ongoing production. The four-week hiatus aims to align production volumes with market demand more effectively.
The Historic Mirafiori Plant
Located in Fiat’s hometown, the Mirafiori factory plays a key role in Italy’s automotive industry. Recently, local labor unions voiced concerns, advocating for the production of a higher volume, more affordable model to replace the Fiat 500e. To address these concerns, Stellantis plans to invest $110 million into the factory, incorporating what they term a "higher performance battery" to produce a hybrid variant of the 500e in the coming years.
Why Isn’t the Fiat 500e Competing Well?
Despite its appealing design and enjoyable driving experience, the Fiat 500e struggles with its value proposition. This week, I had the chance to test drive a 500e, and while its charm is evident, the high price and limited features make it less competitive.
In Italy, the base model Fiat 500e sells for around 29,950 EUR, offering a modest 93 horsepower and a small 24 kWh battery. In contrast, the MG 4, at 31,970 EUR, provides 51 kWh, 168 horsepower, and additional space with a usable back seat. Even within Stellantis’s lineup, models like the Peugeot e-208 and the larger Fiat 600e offer better alternatives with more range and capacity.
The Price Hurdle
Fiat has remained firm on not returning to the era of ultra-low lease prices, but the high cost of the 500e continues to be its Achilles heel. To boost sales, Fiat needs to find ways to reduce the price, though achieving this without resorting to unsustainable subsidies or creative accounting poses a significant challenge. The upcoming hybrid model, expected to launch between 2025 and 2026, might offer a more attractive solution for consumers.
Conclusion: The Road Ahead
Fiat’s current challenges reflect broader issues in the EV market. While demand is growing, it isn’t always in line with projections, and automakers must adapt. Mirafiori’s temporary shutdown is a strategic move by Stellantis to navigate these turbulent market conditions.
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William Kouch, Editor of Automotive.fyi
