Fiat-Chrysler is negotiating with Taiwanese company Foxconn on the development and production of battery-powered vehicles, the US-Italian carmaker said on Friday.
Fiat-Chrysler is in the process of merging with the French company “PSA Peugeot”, which is 12 percent owned by the Chinese company “Dongfeng Motor Co.” It is unclear what impact the proposed Fiat-Chrysler joint venture with Foxconn, formally known as Hon Hai Precision Ind. Co., Ltd. ”, have on merger with PSA, which is expected to be completed next year.
If Fiat-Chrysler reaches an agreement with Foxconn, the joint venture would focus first on China, the largest electric car market with 1.2 million such vehicles sold last year – half the world’s total sales.
“The proposed co-operation would allow the parties to combine mobile software engineering, manufacturing and technology to focus on the growing battery-powered electric vehicle market,” Fiat-Chrysler said.
The talks are aimed at reaching a binding agreement “in the next few months”, the company said.
Car manufacturers around the world have announced a series of partnerships to produce electric vehicles to share the high cost of developing the technology needed to do so.
Companies including “General Motors Co.” and Toyota Motor Co. have joint ventures for electric vehicles with Chinese partners to leverage their experience in making cheap vehicles.
The Chinese government has a credit-based system that encourages car manufacturers to sell electric vehicles, leading to the proliferation of brands. But analysts at the industry expect high development costs to force many of them to merge.
This trend has led to complicated connections among competitors.
Daimler AG’s Mercedes Benz has joint ventures for electric vehicles, both with BZD Auto, one of the world’s largest battery-powered car manufacturers, and with its rival Geely Holding, which is best known abroad as the owner of the Swedish company. Volvo Cars ”. Geely also has two separate electric brands: Geometry and Volvo Polestar.
In addition to its stake in PSA Peugeot, Dongfeng has joint ventures with Nissan Motor Co., Kia Motor Co. and the Renault Group, which also produces electric models.