Stellantis, the leading automotive manufacturer, announced on Thursday its decision to suspend production of the electric version of its iconic Fiat 500 in Italy due to declining demand. This decision comes at a time when the European electric vehicle market is facing a slowdown in sales, raising questions about the future of the industry on the continent.

In a statement, Stellantis explained that this suspension was "necessary due to the current shortage of orders." The company also added that it plans to invest 100 million euros (equivalent to $110 million) to improve the performance of the compact model by equipping it with a more powerful battery, while increasing production capacity at the Fiat Mirafiori plant near Turin.

The current version of the **Fiat 500e** has a range of up to 320 kilometers (199 miles) on a single charge. However, electric vehicles in Europe face several challenges, most notably high prices and limited range, which affect consumer interest, despite Europe’s plans to phase out fossil fuel-powered car sales by 2035.

Although government incentives temporarily boosted electric vehicle sales, high prices and range limitations continue to hinder market growth. Hopes now rest on the development of cheaper and more powerful batteries to increase demand in the future.

In a related development, Europe's plans to manufacture more batteries faced a major setback this week after a Swedish company specializing in electric vehicle batteries announced its intention to reduce its workforce and scale back operations, adding to the challenges facing the electric vehicle industry in the region.