Amid declining electric car sales, Stellantis announced on Monday its plans to manufacture a hybrid 500e small electric car at its Mirafiori plant in Turin, Italy.

After meeting with union representatives in Turin, Stellantis CEO Carlos Tavares made the announcement. The union had been pushing for a long time for the company to increase production at Fiat's historic site by introducing a new model that is both affordable and can be produced in large quantities. The plant is currently producing the 500e model, but Stellantis has to reduce production because there is less demand for fully electric cars. This means the plant's employees have to take longer breaks from work.

Stellantis mentioned that making cheap cars depends on external factors like lower energy prices, the development of electric vehicle charging stations, and long-term auto subsidies. The Italian government criticized the company for making fewer cars in Italy and for producing some Fiat and Alfa Romeo models abroad. This move could help the automaker mend fences with the government.

The Italian government and Stellantis are discussing a plan to raise the company's production in Italy from 750,000 vehicles to 1 million by the end of this decade. The carmaker says that they need a favorable business climate to produce one million cars in Italy by 2030, as agreed by the Italian government and themselves. This environment is currently being negatively impacted by uncertainties surrounding electrification and fierce competition from new competitors.

Ferdinando Uliano, the leader of FIM-Cisl union, attended the meeting with Tavares. He stated that Stellantis informed him and others about the hybrid 500e starting production in Q1 2026. However, no details were given regarding the production volume.