Fiat has dramatically scaled back Chrysler’s ambitious electric car programme since taking over control, scrapping the dedicated ENVI division and incorporating its engineering team into the wider Fiat structure. Photo: Dodge Circuit electric car prototype.

As Fiat Group CEO Sergio Marchionne counts down to his key meeting next week with Italian Industry Minister Claudio Scajola to brief him on Fiat’s revised plans for domestic production, the unions have called for Fiat to invest in electric and hybrid models if the carmaker is to continue to receive lavish state subsidies.

Giorgio Airaudo, a leader of Fiom-CGIL, one of Italy's biggest trade unions with more than a third of a million members, said in an interview that while Fiat was making efficiency strides with the arrival in particular of the new MultiAir system, the carmaker should invest more in alternative technologies, including hybrid and electric cars. “It makes no sense for us to confirm production of old products,” Airaudo said by phone from Turin, reported Bloomberg. “The government needs to link incentives to innovation.”

Italy is one of the most generous countries in Europe in terms of state incentives to the automotive industry; its scrappage scheme is one of the longest running and will continue until the end of the year, while other countries such as Europe’s biggest new car market, Germany, have already wrapped up their very temporary schemes. Fiat is currently due an 800 million euro payment from the Italian government and the subsidy for vehicles such as the methane-powered range can attract incentives of more than 4,000 euros per vehicle. Marchionne has publically called for state incentives to be extended beyond the end of the year.

Airaudo added that he would like to see Chrysler’s electric car plans to be rolled out to Europe. “There’s no reason to limit the development of electric cars to the U.S.,” he said. “We should be developing new technology that we can sell in Europe.” However Fiat has dramatically scaled back Chrysler’s ambitious electric car programme since taking over control, scrapping the dedicated ENVI division and incorporating its engineering team into the wider Fiat structure. ENVI boss Lou Rhodes has now taken on an unspecified role that will cover electric car development for the whole of the Fiat Group and Chrysler combined. During the five-year plan outlined at the beginning of this month, Marchionne said that he didn’t foresee electric cars becoming a mainstream option by 2014 and he envisions Chrysler’s electric volumes to be less than 60,000 units by this date.