MILAN (Reuters) - Fiat owner Stellantis ( STLA ) is expected to announce on Monday a hybrid version of its 500e small electric car to be produced at its Mirafiori plant in Italy, two sources familiar with the matter said, confirming a report by Automotive News Europe.

The announcement is expected at a meeting scheduled in Turin between CEO Carlos Tavares and unions, which have been asking for a new high-volume, cheaper model for Mirafiori to revive its output.

The 500e is assembled at the site in Turin, Fiat's historic home, but a global slowdown in sales of fully-electric vehicles has pushed Stellantis ( STLA ) to significantly slow production rates, introducing protracted furlough periods for the plant's workers.

The move might also help the carmaker improve its relations with the Italian government, which has often criticised the group for its falling output in the country and for making some of its Fiat and Alfa Romeo models abroad.

Stellantis ( STLA ) - Italy's sole major automaker - and the government are in talks over a plan aimed at restoring the group's production in the country to one million vehicles by the end of this decade, from around 750,000 last year.

On Saturday, Industry Minister Adolfo Urso said an agreement was expected in a few days, including announcements of new models for Stellantis' ( STLA ) Italian plants.

Automotive News Europe said earlier on Monday that production of the new hybrid 500e could start no earlier than late 2025. It added Stellantis ( STLA ) was aiming for total annual output of 200,000 500s in Mirafiori, including 125,000 hybrids, versus less than 80,000 produced last year.

The hybrid 500e will be based on the same platform as the 500e EV, while Fiat is phasing out the old version of the 500, both petrol-powered and hybrid, which was assembled in Poland.