The joint venture was revealed in a regulatory presentation.
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.
The venture, in which Hon Hai would hold at most a 40 percent stake, would combine the innovative spirit and strengths of both companies, while focusing on businesses that apply the Internet of Things to the automotive industry, Hon Hai said.
FCA's statement came after Taiwan's Hon Hai - the parent of Foxconn, the Chinese assembler of Apple iPhones - announced the potential joint venture in a separate statement. While the two companies have yet to sign a formal agreement, they plan to target the China market first and consider exporting cars later.
Macron at summit to boost West Africa anti-terror fight
Military assistance will also be placed under this format, including a future force of European special forces, it said. The incident comes amid ongoing clashes between ISIS affiliate Boko Haram and government forces across West Africa.
According to the parties, the plan would be for Foxconn to develop the electronic systems and manage the supply chain while Fiat Chrysler oversees vehicle manufacturing, Automotive News reported. A good example of past investment is Byton, an electric vehicle startup.
Fiat Chrysler and Foxconn are now engaged in the process of signing a preliminary agreement and expect to sign the 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", FCA said.
Mercedes Benz of Daimler AG has joint ventures for electric vehicles with BYD Auto, one of the world's largest manufacturers of battery-powered vehicles, and its competitor Geely Holding, best known overseas as the owner of Swedish Volvo Cars.
Iran gave US 'slap on face', calls missile strikes 'day of God'
In retaliation for the strike, Iran launched dozens of missiles at Iraqi military installations housing U.S. troops on January 8. Ayatollah Ali Khamenei said Friday that Iran's attack against a US military base was "a blow to the USA image as a superpower".
FCA Chief Executive Mike Manley a year ago said the group had "streamlined" the structure of its Chinese partnership and appointed a new leadership to improve its competitiveness.
Foxconn also has invested in Chinese battery giant CATL and a variety of other mostly Chinese transportation tech start-ups.
From Fiat Chrysler's perspective, the automaker has struggled to crack the Chinese market for years, and tightening fuel-economy standards and electric-vehicle mandates make the task even more challenging.
Trump goes after Democrats over impeachment
And vulnerable Republicans could still face such a vote if a Democrat calls for a dismissal at any time during the trial. McConnell said Monday Pelosi's effort to carry on the investigation in the Senate, she is admitting their case is weak.