MILAN — Stellantis and iPhone assembler Foxconn mentioned they plan to create a joint-venture that may provide in-car and connected-car applied sciences.

The 2 firms have signed a non-binding memorandum of understanding to type Cell Drive, a 50-50 three way partnership primarily based within the Netherlands.

Cell Drive will function as an automotive provider, and participate in tenders to offer software program options and associated {hardware} for Stellantis and different automakers, the businesses mentioned in a joint statement on Tuesday.

The software program developed will embody synthetic intelligence-based purposes, 5G communication, upgraded over-the-air companies, e-commerce alternatives and good cockpit integrations, they added.

The partnership is much less in depth than the market had anticipated after Fiat Chrysler, now a part of Stellantis, mentioned final yr it was planning to arrange a three way partnership with Hon Hai Precision Business, Foxconn’s father or mother firm, to construct electrical vehicles and develop internet-connected autos in China.

Finalization of that deal was delayed by merger talks between Fiat Chrysler and Peugeot maker PSA Group, which led to the creation of Stellantis, the world’s fourth-largest carmaker, in the beginning of this yr.

The tie-up between the flagship unit of Foxconn Know-how Group and the carmaking big has the potential to develop into one of many extra vital alliances within the quickly converging worlds of tech and autos. Hon Hai additionally has ambitions to produce underpinnings for electrical autos and has signed offers with Chinese language startup Byton Ltd. and U.S.-based Fisker Inc.

Whereas Byton are Fisker are simply attempting to get off the bottom, Stellantis offered roughly 6 million autos final yr. That quantity of scale presents a chance for Foxconn to diversify a enterprise depending on Apple for a lot of its income.

Hon Hai’s huge presence in China may assist enhance Stellantis’s weak place on the earth’s largest auto market. The automotive producer generated lower than 3% of its income from the Asia-Pacific area final yr.

Chief Govt Officer Carlos Tavares expressed openness to having Stellantis companion with tech giants — together with even Apple, which has been exploring a possible entry into the auto trade for a number of years — throughout a post-merger press convention in January.

“Stellantis is open for enterprise all the time so long as it creates win-win conditions and so long as it doesn’t create any expertise dependence that will penalize the way forward for the corporate,” Tavares mentioned.

Bloomberg contributed to this report