iPhone manufacturer Foxconn is getting into the electric vehicle game, thanks to a planned joint venture with Italian-American automaker Fiat Chrysler (FCA). Foxconn announced on Thursday that the two companies will combine forces to make vehicles for the Chinese market, with FCA handling the manufacturing and the Taiwanese tech giant managing the electronics and software.
The two companies have not yet signed a contract, according to a filing on Taiwan’s stock exchange, but Nikkei reports that they’ve been in talks for months.
FCA, which oversees its eponymous brands as well as ones like Jeep and Dodge, has lagged behind its competitors in embracing electric vehicle technology. The company recently kicked off a merger with French automaker PSA Group, which makes cars under the Peugeot and Citroën brands (among others), partly in order to better attack the changing automotive landscape. The Italian-American automaker has also done some due diligence on a number of struggling EV startups in the US in an attempt to accelerate its electric ambitions, as The Verge first reported in November.
Aided by government policies and subsidies, China has become the biggest market for electric vehicles in the world, and it continued to grow last year despite a slowdown in the country’s overall automotive market. Electric vehicle sales increased by 6 percent in 2019 compared to 2018, despite the overall car sales dropping by 8 percent. And even though China’s economy is cooling off after decades of rapid growth, the electric vehicle market there is expected to easily outpace the ones in Europe and the US in the coming decade.
FCA is far from alone in trying to tap into this trend. Western automakers have spent years carving out space in the market. Some, like FCA, have had more trouble than others, and so teaming up with Foxconn could help the Italian-American automaker find a foothold. In return, Foxconn would get help in diversifying away from consumer technology. To wit: Foxconn chairman Young Liu told Nikkei that he believes the move into electric vehicles could ultimately account for 10 percent of the company’s overall sales.