An electric vehicle joint venture in Thailand is expected to start making sales for Taiwan-based manufacturing giant Hon Hai Precision Industry Co. in 2024, according to an American brokerage.
In a recent research note, the U.S. securities house said the EV joint venture between Hon Hai and Thailand’s state-owned oil supplier PTT Public Co. is expected to lay a solid foundation for the Taiwanese firm’s expansion in the Southeast Asian country and begin to generate revenue in 2024 at the earliest.
During an online investor conference held last week, PTT said a deal with Hon Hai to set up an EV joint venture is expected to be finalized soon. Through the adoption of an open development platform, the new company is expected to shorten its research and development time by two years and lower costs by 20 percent, PTT added.
According to PTT, the joint venture is looking to roll out critical EV components such as chassis, car frames, batteries and control ICs for the production of a whole vehicle, while the new company is likely to provide services to multiple EV brands.
The open development is scheduled to set up an EV data platform which will be used to push for EV development and facilitate the establishment of an EV ecosystem in Thailand, PTT said.
Based on the assessment made by PTT at the investor conference, the U.S. brokerage said Hon Hai, also known as Foxconn on the global market, is expected to establish a foothold in the Southeast Asian market by using Thailand as a spring board.
In September, Hon Hai and PTT signed an agreement to form an EV joint venture in Thailand by investing US$1-2 billion.
Through the joint venture, PTT will use its subsidiary Arun Plus Co. to consolidate the group’s energy development resources and help the two partners build an EV development chain in Thailand, according to Hon Hai.
The partners will set their sights on the Association of Southeast Asian Nations (ASEAN) market, Hon Hai has said.
At a Hon Hai investor conference held earlier this month, chairman Liu Young-way (???) said the company and PTT will run the joint venture under a “Build, Operate and Localize” business model as part of the Taiwanese partner’s goal to forge multinational cooperation in EV development. The new company is scheduled to start operations in the second half of next year.
Hon Hai expects the joint venture to have an initial annual capacity of 50,000 EVs in two to three years and has a plan to boost production to 150,000 units annually in the future.
Hon Hai has intensified its efforts in recent years to carry out the “3 plus 3” initiative, which is designed to diversify product mix and boost profit margins with EV development the core of those efforts.
The “3 plus 3” initiative refers to three emerging industries — EVs, robotics and digital health care — that are being developed through the application of artificial intelligence, semiconductor and communications technologies.
Source: Focus Taiwan News Channel