ZF Friedrichshafen will supply eight-speed automatic transmissions to Fiat-Chrysler Automobiles for use in rear-wheel and all-wheel drive vehicles.
The deal that is ZF's second-largest order ever, following an agreement with BMW in April for the same transmissions.
The transmissions, which can be fitted to vehicles with longitudinally mounted engines, have an integrated electric drive for hybrid variants.
Production will start in 2022 at ZF's factory in Saarbrueken, Germany, with plans to eventually build the transmissions in the U.S. and in China.
ZF executives would not be precise about the size of the agreement, saying only that it was "not too far away" from the value of the BMW order, which had a value of "double digit billion euros" over the contract's lifespan.
"This is our second major order for the 8HP," ZF CEO Wolf-Henning Scheider said in a news release, using the company's internal code for the transmission, "and it confirms our strategy to focus on plug-in hybrids."
ZF said the order would include a "significant share" of hybrid transmissions. ZF is hoping that strong demand for hybrids, especially plug-in versions, will help it navigate the transition from internal combustion engines to full electrification.
Scheider said that ZF would be pursuing a two-pronged strategy for electrification: While betting big on plug-in hybrids, ZF will introduce a compact two-speed drive system for electric cars that includes an electric motor with a maximum output of 140 kW. ZF says a two-stage switching element can increase the range of each battery charge by 5 percent compared to a single-stage system.
Editor's note: The ZF transmission is used in rear-wheel and all-wheel drive transmissions. An earlier version of this story misstated one of the vehicle uses.