Fiat Chrysler Automobiles (FCA) has confirmed discussions to launch a joint venture with the Hon Hai Precision Industry Co, part of the Foxconn Technology Group, to build electric vehicles in China..

Documents filed by Foxconn to authorities have revealed that the two companies are looking to establish a 50/50 joint venture to build these EVs. Foxconn is perhaps best known as manufacturing the Apple iPhone.

In an official statement, FCA said that if the talks are successful, a joint venture could be signed within the next few months.

The official statement:

“FCA confirmed today that it is in discussions with Hon Hai Precision Ind. Co., Ltd. (Foxconn) regarding the potential creation of an equal joint venture to develop and manufacture in China new generation battery electric vehicles and engage in the IoV (Internet of Vehicles) business.

The proposed cooperation, initially focused on the Chinese market, would enable the parties to bring together the capabilities of two established global leaders across the spectrum of automobile design, engineering and manufacturing and mobile software technology to focus on the growing battery electric vehicle market.

The parties are in the process of signing a preliminary agreement which will govern further discussions aimed at reaching final binding agreements in the next few months. There is however no assurance that final binding agreements will be reached or will be reached in that timeframe.”

Speaking with Bloomberg, Foxconn chairman Young Liu said “Hon Hai will be responsible for design, components and supply chain management,” but avoided providing more specifics. He did insist, however, that the iPhone manufacturer will not get into car assembly.

Read Also: VW Announces China-Specific ID. Electric Model As Pre-Production Starts In Shanghai

According to Liu, Hon Hai and FCA are focusing on China due to the sheer scale of the market. Fiat Chrysler is also particularly keen to boost its sales in China where it has less than a 1 per cent share of the local market, trailing GM’s 13.8 per cent share and Ford’s 2.3 per cent share.

China expert and chief executive officer of consultant ZoZo Go says that while Hon Hai has limited experience in the automotive field, it can be of great help to FCA.

“Foxconn knows the supply chain in China better than anyone else, that’s what they do,” he said