Fiat Chrysler Automobiles and Foxconn’s Hon Hai Precision Industry are teaming up to build electric vehicles, with a new joint venture planned. The business will initially focus on the Chinese market, it’s suggested, though neither FCA nor Hon Hai are ruling out potentially exporting EVs to other markets later on.
For a long time, China has been the boom market for electrification. Growth there, though, slowed in late 2019, after the government reduced the incentives for electric vehicles. Even so, EV market share in China still grew in 2019 overall.
The potential for sales, and in a new arena beyond its lucrative business building iPhone handsets for Apple, has drawn Hon Hai’s attention. The agreement with FCA could be signed in Q1 2020, Bloomberg News reports, with the two companies said to each hold 50-percent of the venture.
While exact roles are yet to be defined, what Hon Hai won’t be doing is actually manufacturing complete cars. Instead, the company’s chairman has confirmed, it will be “responsible for design, components and supply chain management,” Young Liu said. That presumably leaves Fiat Chrysler to actually build the vehicles.
The joint venture comes as FCA works through the paperwork on another big deal, the merger with Peugeot Group (PSA). Confirmed late in 2019, that will see the North American behemoth join forces with its European counterpart. The resulting business is expected to be the fourth-largest global car company by volume.
Part of the focus will then be investing into a new electrified car platform. That will share architecture, motors, and batteries, among other components.
It’s unclear what part this Hon Hai deal may or may not play in that electric platform venture. Initially, it’s the volume potential of the Chinese market which has proved most appealing, according to Hon Hai’s Liu. However beyond that there’s the potential to export EVs to other geographies.
That’s a strategy we’ve seen several Chinese automakers attempt in recent years. Geely, for example, acquired Volvo and teamed with the Swedish automaker to launch Polestar, a brand focused on performance EVs. Geely also uses Volvo expertise for its own range of electric cars and SUVs.