The petrol car people actually want to buy: Fiat confirms new hybrid model after making major EV U-turn

Fiat has unveiled its latest car having been forced to introduce it in response to underwhelming demand for its electric vehicles that has seen sales slide in recent years.

The legendary Italian marque has revealed the new 500 Hybrid – a car it said just five years it would never produce.

It is largely based on the Fiat 500e, which when launched in 2020 bosses said would be exclusively sold as an EV as part of the brand’s plan to accelerate its shift to battery power by the end of the decade. 

But with sales in freefall due to low public demand for EVs – and older drivers in particular shunning the electric city car – the company has been forced to backtrack on its previous promise.

As a result, it has redeveloped the 500e’s architecture to incorporate a hybrid drivetrain to provide customers with the petrol cars they want.

Olivier Francois, chief executive of Fiat, said last week that the decision to shoehorn a combustion engine into the 500e’s platform is a ‘bet on the customer and the future’. 

He confirmed production of the 500 Hybrid will start in November, with the intention of delivering 5,000 units in 2025 before upping output to 100,000 cars per year at its Mirafiori factory in Turin – the same plant where 500e is built.

Both the conventional 500 hatchback and 500C cabriolet will be available with the hybrid drivetrain, which is the same 1.0-litre three-cylinder powertrain in the previous-generation 500 and Panda.

It is married to a six-speed manual transmission, as Fiat opts for a traditional route to appease customers who have refused to switch to its electrified 500.

From the outside, it looks almost undistinguishable from its EV sibling. In fact, the only major difference is the reworked grille, with additional venting to cool the engine.

Inside, the cabin is completely reworked from the last petrol-driven 500, with a new 10.25-inch touchscreen taking centre stage.

The motor industry’s EV U-turn 

When the 500e first emerged on the scene in 2020, Fiat insisted it would be sold only with battery power.

Any customers who wanted a 500 with a petrol engine were informed they would need to make do with the older version, which would remain in production – and on sale – simultaneously.

However, its plans were scuppered last summer when the old 500 – a car that dates back to 2007 with little development since – no longer adhered to European safety regulation, leaving Fiat no option but to discontinue it.

The introduction of the EU’s General Safety Regulation II on 7 July 2024 – rules that mandate for all new models to be fitted with a suite of safety features, including Intelligent Speed Assistance (ISA) speed limiters – effectively killed off the old 500 with immediate effect.

This created a significant problem for Fiat, given the worrying lack of appetite for the 500e in recent years. 

Almost two thirds (63 per cent) of 500 deliveries in 2023 in Europe were the older model, with customers wanting a conventional petrol engine despite the 500e offering the latest tech and a far more advanced package that the near 20-year-old variant.

In July 2024, Francois confirmed the company would have to take appropriate measures to modify the 500e’s architecture to take a petrol powertrain for European buyers who have ‘turned their back on the sustainable solution,’ he said at the brand’s 125th-anniversary celebrations in Turin that month.

He said the car company had anticipated that the ‘world would go electric faster and the cost of electrification would go down faster,’ but says the impact of Covid and shortage of raw materials took a significant toll on the EV revolution.

He added that the company ‘couldn’t imagine’ that all but ‘the youngest’ drivers would ‘turn their backs’ on electric cars as a result.

‘This is the reality. We have to face those realities,’ he said.

Just two months after Francois confirmed the new 500 Hybrid would arrive by 2026, Fiat announced in September that appetite for the 500e had sunk so low that it had a surplus of cars and would suspend 500e outputs at the Turin factory for seven weeks.

‘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,’ Fiat’s parent group Stellantis said at the time.

Official figures for 2024 show that Fiat’s registrations in the UK alone fell by 14 per cent year-on-year, partly driven by its EV ambitions. 

Fiat’s U-turn on exclusively selling new models as EVs isn’t unprecedented. 

In fact, sister brands under the Stellantis banner have done the same in recent months.

Jeep’s Avenger SUV was – like the 500e – was originally intended to be sold only with battery power in the UK but in 2024 the brand opted to make a mild-hybrid petrol variant available having seen limited orders for the EV.

Citroen took the same approach recently with its C4 X.

It comes as a number of major car brands, including Mercedes-Benz, Volvo, Audi and Ford have in recent months announced significant delays to their EV plans as a result of lower-than-anticipated uptake of EVs.