Stellantis-owned Fiat has had high hopes for its all-electric Fiat 500, available in the US, but now a report says that the company may backtrack due to low demand and add an ICE version to the lineup.

Earlier this month, Fiat reportedly asked suppliers for quotes to bump up production of the 500e at Stellantis’s Miafiori factory in Turin, Italy, to 175,000 units a year from the 77,260 that were made last year, reports Automotive News Europe.

Turns out, of that total, 100,000 units would be ICE models, but all this was supposed to be very hush-hush since Fiat hasn’t formally decided on the move. News of the switch was first reported by  Il Corriere della Sera and then confirmed by Automotive News Europe.

This is strange, unexpected news, because it’s unusual to convert an EV to a gas engine, and the company already sells an ICE 500, built in Poland and a slightly smaller car that predates the 500e by more than a decade. And the 500e was expected to help push the company toward its emissions goals. Fiat has set the target of being an electric-only brand by 2030.

The argument is that adding in a gas model of the 500e to Mirafiori could smooth over union concerns about “declining volumes of the 500e” and help the company meet Italy’s goal of maintaining the country’s auto production at no fewer than 1 million cars per year, with Stellantis bearing the brunt of that demand being the only volume manufacturer in Italy. Fiat has already cut one of two shifts at Mirafiori last month due to slow sales, laying off some 2,250 workers, with more than half of those affected working on the 500e.

Of course, Fiat’s home turf of Italy has some of the lowest EV adoption rates in Europe, at just 4% of the market. But the far-right Italian government is working to change that, by weighing a plan to invest €930 million ($1 billion) into some enticing financial incentives to nudge drivers toward electric cars. But this hasn’t happened yet, and some Italian shoppers may be waiting for those incentives to be put into action before making the switch – so the automaker enjoys so no home court advantage here.

According to the report, we could see a mild-hybrid 500e – which would be powered by the same 1-liter, 70 hp FireFly gas engine used in Fiat’s Panda minicar, as soon as late 2025 or early 2026.

While Fiat was set to cut production of its current ICE 500 in Poland at the end of next month, that model would move to Fiat’s new Algerian factory, which has a capacity of 90,000 units a year. The model, which would not be compliant with European homologation rules, will be sold in the Middle East and Africa only, reports Automotive News Europe.

If the project is approved, it could take about 18 to 24 months to build the 500e to accept a gasoline engine. The outgoing ICE model currently starts at €17,700 in Italy, with the 500e starting at €29,950, so an ICE version of the 500e is expected to fill that gap.

Fiat is one of the most popular European brands, but Stellantis has had its work cut out for it with the recent launch of the Fiat 500e in the US, Stellantis’s first all-electric vehicle in the US market. The price tag starts at $32,500 plus a $1,595 destination fee, with not much of a solid reputation to back that up for Americans. The car is designed too for the upmarket, trendy urban driver who doesn’t mind the 149-mile range on that price. But of course, in the US last year, Fiat sold practically no cars in the US – a grand total of 605 cars. It sold so few cars in the US that it is now discontinuing the few models it had on offer and going on all in on the 500e.

Photos: Fiat’s new 2024 500e (Source: Stellantis)