Turin - Fiat Chrysler plans to spend 700 million euros (R11bn) to take the next-generation Fiat 500 electric as the carmaker moves on from its failed bid to merge with Renault, which is a pioneer in electric vehicles.
This will be the Italian-American company's biggest single bet on an electric vehicle to date.
Regional Chief Operating Officer Pietro Gorlier told reporters that FCA had started building the new production line at Mirafiori to turn out 80 000 of the new 500 BEVs, its first battery electric vehicle to be marketed in Europe.
The original 500, launched by Fiat in the late 1950s and known affectionately as the "Cinquecento", quickly become a symbol of Italian urban design.
The modern remake, which is still in production today, is expected to continue in its current form as a budget model even after release of the new-generation electric car.
Production of the latter will start in the second quarter of 2020, with room to expand later, Gorlier said.
The 500 BEV will compete in a new niche section of the so-called 'boutique' hatch market, where it will go up against the recently revealed Mini Cooper SE and the upcoming Honda e.
FCA already offered an electric version of the current 500 in the United States back in 2014, in order to comply with local rules on zero-emission cars. But former CEO Sergio Marchionne asked customers not to buy the car as FCA was losing money on it, and said he hoped to sell the smallest number possible.