STELLANTIS has unveiled plans to launch a new generation of affordable electric city cars priced from around €15,000 ($A25,000), as European manufacturers attempt to regain ground lost to increasingly competitive Chinese rivals.
The ambitious E-Car project will see production commence at Stellantis’ Pomigliano d’Arco plant in Italy from 2028, with the first vehicles aimed squarely at the continent’s shrinking entry-level car segment.
Announced by chief executive Antonio Filosa, the initiative forms a critical part of the group’s long-term electrification strategy and aligns with new European Commission proposals designed to encourage the production of small, locally built electric vehicles.
The E-Car program is expected to underpin multiple Stellantis brands and revive Europe’s tradition of affordable urban mobility, a market segment that has contracted sharply in recent years as rising costs, regulatory pressures, and shifting consumer preferences push buyers towards larger vehicles.
“The E-Car is a concept that finds its natural match in the small car success that runs deep in our European Stellantis DNA,” said Mr Filosa.
“Our customers are calling for a revival of small, stylish vehicles, proudly produced in Europe, which are also affordable and environmentally friendly.”
Industry observers, however, question whether European manufacturers can profitably build €15,000 EVs while competing against lower-cost Chinese brands that benefit from extensive vertical integration, lower labour costs, and established battery supply chains.
Under the European Commission’s proposed E-Car framework, vehicles measuring less than 4200mm in length would qualify for additional regulatory incentives, including enhanced CO2 credits and simplified homologation requirements.
The measures are intended to help restore viability to Europe’s struggling small-car market.
One of the first beneficiaries is expected to be Citroen, which is reportedly preparing to revive its iconic 2CV nameplate as a fully electric city car priced below €15,000.
A related Fiat model is also expected to emerge from the program.
The timing reflects growing concern about the collapse of Europe’s traditional minicar segment.
According to industry consultancy Arthur D Little, annual production of A-segment vehicles has fallen from approximately 720,000 units in 2021 to around 320,000 units this year, while segment market share has declined from 9.1 per cent in 2012 to just 3.9 per cent in the first quarter of 2026.
Analysts say the economics of affordable vehicles have become increasingly challenging as safety requirements, cybersecurity regulations, software integration, and emissions standards add cost and complexity to vehicles traditionally sold on price.
At the same time, buyers are increasingly choosing used vehicles or moving into larger segments where monthly finance repayments differ little from those of a city car.
Stellantis believes new development methods, greater supplier integration and strategic partnerships will help overcome those hurdles.
The company says its E-Car models will feature dedicated battery-electric technology developed alongside selected partners to accelerate time-to-market and improve affordability.
Production will take place at the same Italian facility that has long produced the Fiat Panda, one of Europe’s most successful budget cars.
Despite the challenges, industry experts expect affordable EVs to play a crucial role in helping manufacturers meet increasingly stringent European emissions targets.
Transport and Environment cars director Lucien Mathieu predicts several €15,000 EVs will reach European roads before the end of the decade as automakers seek to reduce fleet emissions and avoid costly regulatory penalties.
Whether European manufacturers can achieve profitability while matching Chinese rivals on price remains the key question.
“The challenge extends beyond engineering a €15,000 EV,” said Arthur D Little automotive practice manager Nicola Borgo.
“Legacy European automakers must create a development and manufacturing model that can profitably serve an entry-level market that is smaller, more regulated and facing aggressive Chinese competition – or risk ceding the segment entirely.”
The E-Car project represents more than a new model range for Stellantis as it is a test of whether Europe’s automotive industry can reinvent affordable mobility for the electric age while keeping production, jobs and technology development on home soil.