The carmaker is expected to disclose a four-year plan this June detailing the phase-out by 2022.
With this move, the auto giant joins the likes of Toyota and Porsche who earlier stated that they were moving away from diesel engines.
The market share of diesel cars has seen quite a drop following the Volkswagen emissions scandal in 2015 that caused a political counterblast against the fuel. This led to slashing of incentives for diesel and even calls for a ban on it altogether. Diesel automobile sales dipped in Europe over the past year.
Amid tight emissions regulations and new European standards, the cost to build diesel engines has gone up an estimated 20% from earlier.
With this hitting affordability of diesel-based vehicles, electric car volumes are picking up steam with the aid of lower part costs.
Fiat is, however, expected to maintain diesel options for its commercial vehicles in the U.S., where diesel is not likely to go away so soon. The strong demand for diesel in Italy remains as well.
As this unfolds over the years, it has become more and more clear that the world is looking for cleaner sources of energy. With a generation keen to shift, this could be part of a larger change.