Fiat Chrysler and Foxconn Are Looking to Jolt Tesla

Fiat Chrysler is formally teaming up with iPhone maker Foxconn to give Tesla a run for its money, at least in China.
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Jeep and Maserati maker Fiat Chrysler Automobiles (FCAU) - Get Report is formally teaming up with Taiwanese iPhone and electronic-components maker Foxconn Technology Group to get into the electric carmaking game and give Tesla (TSLA) - Get Report a run for its money.

Both Fiat Chrysler and Foxconn confirmed in a statement they are working together to "explore the possibility" of forming a joint venture to produce electric vehicles and develop a platform for cars that can connect to the internet.

"If the companies move forward, the plan would be to manufacture electric vehicles in China for China's domestic market with the potential to export to other markets in the future," Foxconn said in the statement.

The announcement comes in the wake of Tesla cutting the ribbon on its Shanghai Gigafactory, which powered up production of battery cells as well as Model 3 cars in December, just 12 months after breaking ground on the facility.

It also comes amid a massive push by the Chinese government to put as many clean-energy vehicles on Chinese roads as it can. Beijing has set an aggressive five-year goal of making both electric and hybrid vehicles account for at least a fifth of the country's auto sales.

Nio (NIO) - Get Report , another Shanghai-based electric-vehicle maker, is set to receive $1 billion from state-owned auto maker GAC Group, which will cover its 2020 cashflow needs, according to reports this week.

Fiat Chrysler, which announced last year it will merge with Peugeot owner PSA Group, is late to China's electric car game, and to the EV space more generally. Other carmakers including Volkswagen  (VLKAF) , Ford (F) - Get Report and GM (GM) - Get Report already have either produced or announced plans to produce EVs in China and elsewhere.

Shares of Fiat Chrysler were down 0.36% at $13.85 in morning trading on Friday.