Stellantis plans $17,500 small EV to revive European market

* E-Cars are small, low-cost EVs for European market * Production set to start in 2028 in Pomigliano, Italy * Price tag of around 15,000 euros, source says * Group aims to boost demand and plant utilisation By Giulio Piovaccari MILAN, May 19 (Reuters) - Stellantis ( STLA ) plans to launch a new small, low-cost category of fully electric vehicles in an effort to revive Europe's shrinking entry-level car segment and ailing manufacturing sector. The Fiat, Opel and Citroen owner said production of the affordable, compact and fully electric "E-Car" will start in 2028 at its Pomigliano d'Arco plant in Italy, with potential for "significant" volumes. It will have a price tag of around 15,000 euros ($17,500), a source close to the matter said. Automakers have neglected low-cost, entry-level models in recent years due to rising costs linked to electrification and safety regulations, as well as a search for higher margins which has driven them towards mid-sized and larger cars. E-CAR TO DRAW ON PARTNERSHIPS The E-Car will draw on partnerships to keep costs down and speed up development, and will help support local manufacturing jobs, Stellantis ( STLA ) said in a statement on Tuesday. CEO Antonio Filosa, who is due to present a new business plan on Thursday, said it aimed to tap into demand for "small, stylish vehicles" made in Europe for the European market, adding the E-Car would come in "new models for multiple brands". Stellantis ( STLA ) has argued that Europe, where safety and emissions rules have significantly added to the cost of new cars, needed a new generation of stripped-down, cost-efficient small vehicles, in the style of Japan's 'kei cars'. JAPAN KEI CARS A MODEL FOR E-CARS Kei cars are urban vehicles traditionally sold in Japan with size and engine restrictions, enjoying lower tax and insurance costs. They cover a significant portion of the local market. The European Commission has recognised the new E-Car segment for its potential to boost European design and manufacturing jobs and support a wider EV adoption, especially for everyday city mobility, Stellantis ( STLA ) said on Tuesday. Stellantis ( STLA ) has warned that without more affordable EVs, the EU's push towards zero-emission mobility risks stalling, particularly among lower-income consumers. Safety features in the EU, such as sensors detecting whether a driver is falling asleep or an SOS button, are required on cars from the smallest ones up to larger SUVs, with a larger impact on the cost of cars used mainly for short city journeys. ADDRESSING EUROPE'S LOW CAPACITY UTILISATION With expected high volumes, the E-Car should help Stellantis ( STLA ) improve its underused production capacity in Europe, a goal Filosa is also pursuing by expanding cooperation with Chinese partner Leapmotor. The two automakers announced earlier this month the joint production of two models in Spain, while Stellantis ( STLA ) suggested manufacturing cooperation with Dongfeng could expand beyond China. The Pomigliano plant manufactures models including the Fiat Panda, which is set to remain in production at least until 2030. Italian unions welcomed the announcement and said in a statement the new production should eventually allow the plant to reach full employment. They also confirmed the E-Car price. ($1 = 0.8590 euros) (Reporting by Giulio Piovaccari, editing by Alvise Armellini and Alexander Smith)