MILAN, ITALY (AP)—Fiat Chrysler is in talks with the Chinese company Foxconn to develop and manufacture battery electric vehicles.

The U.S.-Italian automaker confirmed the discussions in a statement released Friday. Fiat Chrysler is in the process of merging with French carmaker PSA Peugeot, which is 12% owned by Chinese company Dongfeng.

Both Fiat Chrysler and Peugeot have lagged in developing electric cars and have also struggled to boost sales in China.

A joint venture would focus first on China, which is the biggest market in the world for electric cars.

About 1.2 million electric vehicles were sold last year in China, about half the global total.