California electric-car startup Evelozcity is in talks with European contract manufacturer Magna Steyr for U.S. production, sources said.
A letter of intent has already been signed between the two companies, the sources told Automobilwoche, a sister publication of Automotive News Europe.
Evelozcity is developing an electric car aimed at the mass market, a delivery van and an autonomous ride-hailing vehicle. The company aims to bring its first vehicle to market in the U.S. by 2021 and eventually will expand sales to Europe and China.
Magna Steyr is expected to handle the production of Evelozcity vehicles and preferably build a manufacturing plant in the U.S., the sources said.
Neither of the two companies would confirm the potential collaboration.
"We are looking at partners to handle production, but there are no contracts yet," a spokeswoman for Evelozcity said.
"We are always in discussions with customers about new business," Magna CEO Don Walker told Automobilwoche.
Magna Steyr is a division of Canada's Magna International. Magna Steyr builds cars for Mercedes, BMW, Toyota and Jaguar at its contract manufacturing factory in Graz, Austria, according to Automotive News Europe's guide to European Assembly Plants.
Evelozcity is led by former BMW finance chief Stefan Krause, ex-BMW technology manager Ulrich Kranz and former BMW designer Richard Kim. Kranz and Kim were involved in the development of BMW's electric i subbrand.
Former General Motors Chairman and Opel CEO Karl-Thomas Neumann joined the company last year.