Fiat Chrysler (FCA) reportedly said on Monday it had begun to prepare for production of a plug-in hybrid version of the Jeep Renegade as part of its electrification drive to meet tougher emissions rules.

A Reuters report noted the car maker said last June it would spend EUR9bn (US$10.3bn) on electric and hybrid cars over the next five years to become fully compliant with emissions regulations across regions.

It also pledged to phase out diesel engines in European passenger cars by 2021.

FCA told Reuters the Renegade plug-in hybrid, expected on sale early in 2020, would be produced at FCA's Melfi plant in southern Italy which is already producing the combustion engine version of the model and the Fiat 500X crossover.

Over EUR200m would be spent on the new engine, the company said, while workers would be retrained for the new technology and the plant modernised.

FCA also told the news agency it plans to offer a total of 12 electric propulsion systems, including battery electric vehicles (BEV), plug-in hybrids (PHEV) and full hybrids, by 2022 and 30 different models would be equipped with one or more of these systems.

Reuters noted former FCA chief executive Sergio Marchionne had long refused to embrace electrification, saying he would only do so if selling battery-powered cars could be done at a profit.

But Tesla's success and the need to comply with tougher emissions rules forced Marchionne to commit to what he used to refer to as "most painful" spending.

Marchionne died unexpectedly in July after succumbing to complications from surgery, but his successor, Mike Manley, vowed to continue the strategy laid out in June, the report added.