Star Metro - Stellantis joins race to build mini-EVs for Europe

It it the latest carmaker on the continent to embrace more affordable EVs in the face of brutal competition from Chinese rivals looking to make inroads overseas.

The company did not specify which of its 14 brands would start producing its "E-Cars" at Stellantis's Pomigliano d'Arco factory near Naples in Italy.

"Our customers are calling for a revival of small, stylish vehicles, proudly produced in Europe, which are also affordable and environmentally friendly," chief executive Antonio Filosa said in a statement.

Filosa was brought in last year with a mandate to address multiple challenges for the world's fourth-biggest automaker, not least under-utilisation of its European factories in a market still recovering from the Covid-19 pandemic.

Automakers are also racing to shift away from combustible engines under EU rules that call for 90 percent of all cars sold in the bloc to be electric by 2035.

To ease the transition, the European Commission created last December a new category for small EVs that would get more favourable tax treatment and count more in their overall electric offerings -- if they are built in Europe.

Renault has already jumped in with its R5 and Twingo models, while Volkswagen is rolling out a new ID.Polo, unveiled last month.

"The E-Car... is being developed in the true tradition of European 'people's mobility -- addressing the unprecedented contraction of the small affordable car segment in Europe in recent years," Stellantis said.

The announcement comes as the company is reportedly exploring deals with Chinese automakers to sell them underused European factories.

K.Morrison--SMC