Fiat Chrysler and Foxconn to team up to manufacture electric vehicles: Hon Hai

Italian American automaker Fiat Chrysler and the parent of iPhone assembler Foxconn plan to set up a joint venture to manufacture electric vehicles and to engage in the business of wirelessly connected vehicles, Hon Hai said on Thursday.

Fiat Chrysler (FCA) and Taiwan’s Hon Hai are negotiating a 50-50 joint venture, Hon Hai said in a statement. Hon Hai would hold its 50 percent share both directly and indirectly and its direct shareholding would not exceed 40 percent.

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Hon Hai is the parent of Foxconn , the Chinese assembler of Apple iPhones.

FCA last month reached a binding agreement for a $50 billion (38 billion pounds) tie-up with France’s PSA that will create the world’s No. 4 carmaker.

The joint venture with Hon Hai will produce vehicles for the Chinese market, but many details of the accord are still to be worked out, one source close to the matter said, adding that a final deal was expected to be signed in the coming months.

Foxconn has been investing heavily in a variety of future transportation ventures for several years, including Didi Chuxing, the Chinese ride services giant, and Chinese electric vehicle startups Byton and Xpeng.

Foxconn also has invested in Chinese battery giant CATL and a variety of other mostly Chinese transportation tech start-ups.

FCA is set to launch its first full-electric model — the 500 small car — this year.